Ripple is urging the U.S. Securities and Exchange Commission (SEC) to finalize its proposed crypto rules, arguing that clear regulations are needed to protect investors and keep innovation in the United States.
Ripple Chief Legal Officer Stuart Alderoty said the company supports the proposal but stressed that the industry needs clear rules instead of years of case-by-case enforcement.
Ripple Backs SEC Proposal but Seeks End to Case-by-Case
On October 20, Ripple filed a comment letter supporting the SEC's proposed Regulation Crypto Assets. Alderoty said the agency has clear authority to adopt the rules and called for a clearer approach to digital asset regulation.
"We support the proposal, and the SEC has clear authority to adopt it."
He said that years of case-by-case enforcement have pushed crypto innovation overseas. Ripple wants rules that follow existing laws and clearly explain when a digital asset falls under securities laws.
Alderoty also noted that a token is not automatically a security just because it was sold through an investment contract. Under the Howey test, the focus should be on the promises made by the issuer and whether those commitments have ended, rather than using decentralization as the main test.
Ripple Points to Its $150 Million Legal Battle
Ripple's push for clearer rules comes after its long legal battle with the SEC. Alderoty said the company spent more than $150 million seeking legal clarity, adding, "No company should have to do that to learn what the law requires."
He believes clear rules would help companies understand their legal duties without facing years of costly court battles. Alderoty said that a clearer framework could attract investment, protect investors, and help keep crypto innovation in the U.S.
SEC Proposal Offers Two Fundraising Exemptions
The SEC introduced its proposed Regulation Crypto Assets in August. It includes two possible exemptions for qualifying digital asset investment contracts.
Under the SEC proposal, eligible startups could raise up to $5 million over four years through one exemption. Another would allow offerings of up to $75 million within 12 months, subject to additional disclosure and financial reporting requirements.
The proposal also includes a safe harbor to help determine when an issuer has fulfilled its original promises and a token is no longer linked to an investment contract.
Ripple supports this approach but wants a more reliable process for exchanges, brokers and other market participants.
Other Crypto Groups Join Ripple's Push
Ripple is not alone. A group including Chainlink, Hedera, Stellar, Aptos, Avalanche and Cardano has also submitted a joint letter calling for clearer rules, including recognition of digital commodities in the rule text.
The SEC is now reviewing industry feedback. Although the main comment period ended on October 20, the supplied information says the regulator is expected to continue accepting comments as it considers changes before a final commission vote.
