Ripple filed its formal comment letter with the SEC on October 20. The company responded to the agency’s proposed Regulation Crypto Assets and urged the Commission to adopt it as a final rule
Ripple filed its formal comment letter with the SEC on October 20. The company responded to the agency’s proposed Regulation Crypto Assets and urged the Commission to adopt it as a final rule.
Chief Legal Officer Stuart Alderoty published a summary of the letter, stating the SEC has ample statutory authority to act and that the proposal stays faithful to existing securities law.
The letter argues the proposal rests on three principles rooted in the 1946 Howey decision. The investment contract is the security, not the token. Promises made by issuers can end. Whether a contract exists turns on what the issuer actually represented, not on any general market concept of decentralization.
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…
— Stuart Alderoty (@s_alderoty) October 20, 2026
Ripple uses its own history to make the economic case for the proposal. After the SEC filed its complaint in December 2020 alleging XRP itself was a security, XRP’s price fell roughly 70% within days. Approximately $15 billion in market value disappeared. Nearly every exchange accessible to U.S. customers de-listed XRP or blocked access.
When a federal court ruled in July 2023 that XRP was not itself a security, XRP’s market cap rose by roughly $21 billion. Coinbase and Kraken announced restored XRP trading the same day. Ripple spent more than $150 million in legal fees to reach that outcome.
Ripple CEO Brad Garlinghouse has revealed that the company almost shut down. Alderoty wrote: “No company should have to do that to learn what the law requires.”
The letter also documents wider economic damage. The U.S. share of global crypto developers fell from 38% in 2015 to 19% in 2024. Only about 17% of coin offerings between 2016 and 2018 had U.S.-based teams. Ripple itself hired predominantly outside the U.S. during the period of peak regulatory uncertainty.
Ripple supports the proposal but offers five refinements. It asks the SEC to add a “no presumption” clause for Form TR non-filers. It wants Rule 400 extended to cover the Investment Company Act and Advisers Act. It also wants the SEC to fix secondary market preemption rules that exclude registered broker-dealers.
Ripple also wants intermediaries protected when issuers fall behind on filings. Finally, it asks the SEC to confirm that holding, lending, pledging, or staking a crypto asset does not affect a covered investment contract’s status.
The proposal, if finalized, would codify the legal principle the Ripple court applied in 2023 to determine that XRP is not a security. The comment period closed October 20. The SEC now moves toward issuing a final rule.
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