XRP News Today: Ripple Submits Letter to SEC on Crypto Regulation

Ripple has taken a significant step in the ongoing debate over crypto regulation by submitting a new letter to the U.S. Securities and Exchange Commission’s (SEC) Crypto Task Force. This letter addresses a critical question posed by SEC Commissioner Hester Peirce in her “New Paradigm” speech: when does a digital asset separate from the investment contract under which it was first sold? The update was confirmed by Stuart Alderoty, Ripple’s Chief Legal Officer, through a post on X.

This latest communication underscores Ripple’s commitment to engaging directly with regulators to help shape the future rules of the crypto market. The focus is not solely on Ripple or XRP but on establishing clarity for the entire digital asset ecosystem. Alderoty’s public confirmation of the letter highlights Ripple’s dedication to seeking answers to the industry’s big questions, not just defending against lawsuits but actively participating in regulatory dialogue.

Ripple’s engagement with U.S. regulators is part of a long-standing pattern of working with lawmakers, regulators, and the courts. Since the SEC filed its lawsuit against Ripple in December 2020, accusing the company of selling XRP as an unregistered security, Ripple has been one of the most vocal challengers of the SEC’s approach to crypto oversight. Alderoty has been a central figure in Ripple’s legal battles, leading the company’s defense strategy and pushing for regulatory clarity.

The core issue addressed in Ripple’s letter is a legal gray area: when can a crypto token, once tied to an investment contract, stand on its own and no longer be regulated as a security? The SEC typically uses the “Howey Test” to determine if a transaction qualifies as an investment contract. Many tokens, according to the agency, meet this definition when sold to investors expecting profits based on the issuing company’s efforts. Ripple, along with voices like Commissioner Peirce, argues that over time, a token can evolve beyond this relationship, especially once it is broadly distributed or decentralized. This distinction is crucial for Ripple and the entire U.S. crypto market.

By responding to Commissioner Peirce’s challenge, Ripple is not only defending itself but also shaping the broader conversation around crypto regulation in the U.S. This effort comes as the SEC’s Crypto Task Force faces increasing pressure to clarify its policies from industry stakeholders, lawmakers, and even some within the SEC. Ripple’s letter indicates that the company is proactively engaging with regulators to push for clearer rules that can guide the entire industry. While the full contents of the letter have not been publicly released, Alderoty’s announcement suggests that Ripple views this as a significant contribution to the ongoing debate.

For XRP holders and crypto market watchers, Ripple’s legal and regulatory actions have significant implications. In 2023, Ripple achieved a partial legal victory when Judge Analisa Torres ruled that XRP sales on public exchanges do not qualify as securities transactions. However, this decision did not resolve all questions. By continuing to press the SEC on foundational issues, Ripple aims to create a regulatory environment where crypto projects can operate with clearer guidelines and less fear of sudden enforcement actions. This is beneficial not only for Ripple but also for the health and stability of the entire U.S. digital asset space.

As the SEC’s Crypto Task Force reviews Ripple’s submission, the crypto world will be closely monitoring the developments. With Alderoty leading Ripple’s legal strategy, the company continues to balance court battles with behind-the-scenes policy work. The broader question of when a digital asset can break free from the legal weight of its original investment contract remains one of the defining regulatory challenges of the coming years. Ripple’s latest move marks another important chapter in its effort to shape not only its own future but the future of crypto regulation across the United States.