Ripple backs SEC crypto regulation after XRP legal fight cost over $150 million

Ripple is backing the SEC’s proposed crypto regulation after spending more than $150 million seeking legal clarity over XRP. In a 20-page comment letter filed on October 20, 2026, the company supported Regulation Crypto Assets while urging the agency to distinguish an investment contract from the token sold through it.

Key takeaways

• Ripple supports rules that separate tokens from investment contracts.
• Six crypto projects jointly urged codification of the digital commodity framework.
• The Blockchain Association wants a $10 million startup exemption.
• The SEC is accepting feedback beyond its formal deadline.

Ripple backs SEC crypto regulation grounded in issuer promises

Rather than classifying the underlying crypto asset as a security, Ripple favors applying the Howey test to the investment arrangement itself. The company’s letter urges the SEC to assess the end of that arrangement based on an issuer’s commitments, rather than relying on a standalone decentralization test.

Per the proposal, an investment contract would terminate once an issuer finishes or indefinitely halts the core managerial duties pledged to investors, as long as no further such commitments are made.

Stuart Alderoty, Ripple’s Chief Legal Officer, stated that the firm’s legal fight concerning XRP cost more than $150 million. He contended that enforcement carried out “case by case, coin by coin” had driven innovation abroad.

“What matters is what an issuer actually promised and when those promises end, not a subjective decentralization test,” Alderoty said.

Ripple also seeks protections allowing exchanges and brokers to rely on a properly filed Form TR, the proposed filing establishing that essential managerial activities have ended. It requests consistent treatment across federal securities statutes and clarification of secondary-market transactions under Rule 500.

Six projects press for a digital commodity framework

Chainlink, Cardano, Hedera, Stellar, Aptos and Avalanche jointly urged the SEC to codify its digital commodity framework. Their advocacy accompanies Ripple’s support for the proposed rules and requests for changes.

“Builders need lasting certainty. Codifying this progress would be a meaningful step toward keeping America the home of digital asset innovation,” said Taylor Barr, Chainlink’s head of policy.

The Blockchain Association separately asked the SEC to increase the proposed startup fundraising exemption from $5 million to $10 million. Ripple is also seeking exemptions from full securities registration for certain crypto offerings.

Fundraising exemptions and feedback after the deadline

Under the SEC’s proposed crypto rule, qualifying U.S.-based issuers could access new fundraising exemptions. Eligible startups could raise as much as $5 million over four years through one route, while a second option would let issuers collect up to $75 million within 12 months, subject to extra disclosure and financial reporting obligations.

Neither exemption is in force. The proposal also includes a safe harbor for determining when a crypto asset is no longer associated with an investment contract.

The formal comment period ended on October 20, 2026. The SEC said it would continue accepting public comments after the deadline.

Article produced with the assistance of artificial intelligence and reviewed by the editorial team.