Ripple Labs has backed the US Securities and Exchange Commission’s (SEC) proposed crypto regulations, calling for clearer rules on when digital assets should be treated as securities.
On October 20, 2026, Ripple submitted a formal comment letter supporting the SEC’s proposed Regulation Crypto Assets framework. Signed by Chief Legal Officer Stuart Alderoty, the letter argues that regulators should distinguish between a digital token and the investment contract under which it is offered or sold.
1/ Today Ripple filed its comment letter on the SEC’s proposed Regulation Crypto Assets. We support the proposal, and the SEC has clear authority to adopt it.
2/ Years of “case by case, coin by coin” enforcement has pushed innovation offshore. We need holistic rules for digital assets.
3/ The proposal stays faithful to Howey. The investment contract is the security, not the token. What matters is what an issuer actually promised and when those promises end, not a subjective “decentralization” test.
4/ We know the cost of ambiguity firsthand. Ripple spent more than $150 million to get clarity. No company should have to do that to learn what the law requires.
5/ Clear rules grounded in existing law will bring capital, investor protection and innovation to the U.S.
Read our full letter: https://t.co/hOCJJwUo7Z— Stuart Alderoty (@s_alderoty) October 20, 2026
Ripple also wants regulatory obligations to end when issuers fulfil their essential promises to investors. The company cited more than $150 million in legal fees from its dispute with the SEC as an example of the cost of regulatory uncertainty.
The submission followed the proposal’s August 2026 introduction and arrived on the final day of the public comment period. The SEC will review feedback before deciding whether to revise or adopt the proposed rules.
Read also: Ripple CEO Backs Treasury Secretary’s Call to Pass CLARITY Act
What the SEC’s crypto proposal would change
The SEC introduced its Regulation Crypto Assets proposal in August 2026 to clarify rules for crypto fundraising and determine when certain digital assets may no longer be considered investment contracts.
The proposal includes two exemptions from securities registration requirements. One would allow eligible projects to raise up to $5 million over four years, while another would permit offerings of up to $75 million within 12 months. Both would require investor disclosures, with the larger exemption carrying additional financial reporting requirements. The proposal also outlines conditions under which a crypto asset could cease to be associated with an investment contract for securities-law purposes.
Ripple supports this approach but wants clearer standards for determining when an issuer’s essential managerial activities have ended. It also wants exchanges and brokers to have greater certainty when relying on the proposed Form TR filing to assess a token’s regulatory status.
X user Blue Tears welcomed the difference between tokens and investment contracts, writing that regulators are finally starting to recognize the difference. He argued that when issuers do not attach promises to tokens, those tokens can function as tools rather than securities, potentially creating a clearer path for compliant projects. Blue Tears also said Ripple had handled this regulatory development strategically.
@Cointelegraph 监管终于开始分清「代币」和「投资合同」了。按这逻辑，只要发行方不打包承诺，代币就是工具不是证券——反而给合规项目留出路径。Ripple 这步押得聪明。
— 蓝眼泪（互关） (@BlueTearsPT) October 21, 2026
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Some crypto users want legislation instead
Although the proposal could provide clearer rules, it would rely on SEC regulations rather than a new law passed by Congress. Agency rules can be amended or rescinded, leaving businesses exposed to potential policy changes under future administrations.
This concern was featured in a post by X user Tensa Gizzlar, who argued that SEC and Commodity Futures Trading Commission guidelines are not laws and could be reversed by the next administration. He called for Congress to pass the Clarity Act and urged Senator Cynthia Lummis to push for its inclusion in year-end funding legislation.
@s_alderoty The SEC/CFTC Guidelines are NOT LAW an can be REVERSED by the next administration. We still NEED the Clarity Act to be passed!! @SenLummis Get the Clarity Act PASSED AS A RIDER BY END OF THE YEAR!! You know what to do…GET IT DONE!
— Tensa Gizzla (@ItsMrWallace) October 21, 2026
This concern indicates a more important policy question of whether regulatory agencies can provide sufficient long-term certainty or whether Congress needs to establish a more permanent statutory framework. The proposed rules remain under consideration, and their final provisions could differ from the current draft.
Ripple’s $150 million legal battle could give it an edge for the proposal
Ripple’s support for the proposal follows its lengthy legal dispute with the SEC over XRP sales. In July 2023, a federal court distinguished between different types of XRP transactions rather than treating every transaction identically.
Ripple has said it spent more than $150 million on legal fees during its fight with the regulator. That experience may give the company detailed knowledge of the legal issues surrounding token sales, investment contracts and secondary-market trading.
However, smaller crypto projects may lack the resources to fund lengthy legal disputes or retain specialist legal teams. If compliance remains expensive, established companies could have an advantage over newer competitors.
X user Jing Michelle commented on this change, pointing to Ripple’s substantial legal expenses and observing that the company is now helping shape the rules after years of fighting the SEC. However, the final rules have not been adopted, and there is no guarantee they will favour Ripple or reproduce the legal outcomes it previously secured.
@s_alderoty the receipts 💅 $150M in legal fees for one clause — ripple fought coin-by-coin for years, now it helps write it ✨ you don’t win by beating the rulebook.
— jingmichelle (@jing2msn) October 21, 2026
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