Ripple vs SEC Heats Up: XRP Community Rallies Behind Legal Comeback

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Ripple has once again fired a precision shot across the bow of the U.S. Securities and Exchange Commission (SEC). This time, the blockchain company is publicly responding to a pointed question raised by SEC Commissioner Hester Peirce, and the XRP community is listening closely.

The latest development came, when Ripple’s Chief Legal Officer Stuart Alderoty shared a new letter addressed to the SEC’s Crypto Assets and Cyber Unit. The letter, which Ripple made public via social media, directly answers a challenge posed in Commissioner Peirce’s recent “New Paradigm” speech: When does a digital asset separate from an investment contract?

The question strikes at the very heart of how cryptocurrencies are regulated in the United States, and Ripple, clearly, is done waiting for clarity.

“We Need Rules, Not Riddles”

In its letter, Ripple lays out a clear position: secondary market transactions involving digital assets like XRP should not be considered securities. The argument isn’t just technical, it’s grounded in years of legal precedent, notably referencing Judge Analisa Torres’ 2023 ruling, which stated that XRP’s sales on public exchanges were not securities transactions.

“Ripple’s reply is not just a rebuttal,” said Alderoty. “It’s a roadmap. We’re calling for real standards, not shifting interpretations.”

Ripple’s frustration is echoed by many in the industry who argue that the SEC’s vague criteria, such as “sufficient decentralization” or “full functionality”, have become regulatory quicksand. Projects often struggle to stay compliant when no clear definitions exist.

XRP regulation

Regulatory Chaos or Calculated Silence?

Commissioner Peirce, often nicknamed “Crypto Mom” for her pro-innovation stance, has long argued that the SEC’s enforcement-first approach is harmful to the blockchain ecosystem. In her recent speech, she criticized the Commission’s failure to provide actionable guidance, and Ripple seized that opening.

The letter not only challenges Peirce’s colleagues, it proposes a solution: Congressional oversight and a Safe Harbor framework for digital asset developers.

Ripple believes regulatory clarity shouldn’t be left to backroom decisions or sporadic court battles. “Determining whether or not a token is a security can’t remain a guessing game,” the company insists.

And the company isn’t alone. Multiple lawmakers and policy groups have voiced support for codified rules that go beyond outdated interpretations of the Howey Test, a legal standard from the 1940s now stretched to fit 21st-century innovations.

XRP Price Holds Steady as Markets Eye Clarity

In a market often driven by rumor and regulation, Ripple’s assertive stance hasn’t rattled investors, quite the opposite.

As of May 28, 2025, XRP is trading steadily around $2.29, up nearly 4% since last week’s legal update. That resilience comes despite broader market volatility and indicates that traders are pricing in Ripple’s progress against the SEC.

This isn’t just a legal saga anymore. It’s a pivotal moment that could shape how crypto tokens are treated by U.S. regulators, setting a precedent with implications far beyond Ripple.

“This move sets the tone,” said one X (formerly Twitter) user. “Ripple’s not just defending XRP. It’s defending the future of crypto innovation.”

A Shift in the Winds?

The SEC, for its part, has yet to officially respond to Ripple’s latest filing. But it’s hard to ignore the strategic implications.

Ripple has already settled with the SEC for $50 million, a significant discount from the originally proposed $125 million. And though the company didn’t admit wrongdoing, it’s clear Ripple is now shifting from defense to offense.

The question now is whether the SEC will engage with the substance of Ripple’s proposals, or continue to rely on enforcement instead of legislation.

Crypto insiders believe this move might finally nudge the needle in Washington. “When a company like Ripple starts talking about safe harbor rules and congressional oversight, people pay attention,” said a policy analyst at the Blockchain Association.

Conclusion: Ripple’s Not Just Playing Defense Anymore

Ripple’s reply to Commissioner Peirce is more than a legal memo, it’s a declaration. The company is stepping into the policy arena with confidence, pushing for a regulatory framework that could benefit the entire industry.

For XRP holders and crypto advocates, it’s a refreshing pivot from passive compliance to active reform.

And with Commissioner Peirce’s own speech challenging the SEC’s status quo, the moment feels ripe for a shift. If Ripple gets its way, 2025 could be the year when U.S. crypto regulation finally gets rewritten, not in courtrooms, but in Congress.