After spending over $150 million in efforts to seek legal clarity for XRP, Ripple is now supporting the crypto regulatory proposal put forward by the U.S. Securities and Exchange Commission (SEC). According to a 20-page letter submitted by the company on October 20, 2026, Ripple supports the "Regulations on Crypto Asset Supervision" and urges SEC to distinguish between investment contracts and tokens sold through such contracts.

Key Points

• Ripple supports the rule of defining tokens separately from investment contracts.
• Six crypto projects jointly urge for the inclusion of a digital goods framework in the regulations.
• The Blockchain Association hopes to increase the exemption amount for startups to 10 million US dollars.
• SEC indicates that feedback will continue to be accepted after the official deadline.

Ripple supports SEC encryption regulation based on issuer commitments.

Ripple tends to apply Howey testing to the investment arrangement itself, rather than directly classifying the underlying crypto assets as securities. In its letter of opinion, the company urges SEC to determine when the investment arrangement terminates based on the commitments made by the issuer, rather than relying on separate “decentralized” tests.

According to this proposal, as long as the issuer has completed or indefinitely ceased its core management responsibilities promised to investors, and no further such commitments are made, the investment contract shall be terminated.

Ripple Chief Legal Officer Stuart Alderoty stated that the company has spent over $150 million on legal battles surrounding XRP. He believes that law enforcement, which is carried out on a case-by-case and coin-by-coin basis, has driven innovation overseas.

Alderoty indicates: "What is truly important is what the issuer actually commits to, and when these commitments will end, rather than some subjective decentralized testing."

Ripple also seeks relevant protective measures to enable exchanges and brokers to rely on the properly submitted Form TR. The proposed document aims to confirm that key management activities have been completed. Ripple also requests consistent treatment under the federal securities law framework and asks for clarification regarding the applicability of issues related to secondary market transactions below Rule 500.

Six projects drive the digital goods framework

Chainlink, Cardano, Hedera, Stellar, Aptos, and Avalanche jointly urge SEC to officially incorporate their digital product framework into the rules. Their initiative is presented simultaneously with Ripple's support for the proposed rules and its requests for modifications.

Chainlink Policy Director Taylor Barr stated: "Builders need sustained certainty. Codifying these advancements into rules will be an important step towards ensuring that the United States continues to be a hub for digital asset innovation."

The Blockchain Association has separately requested that SEC raise the proposed exemption limit for startup financing from $5 million to $10 million. Ripple is also seeking to exempt certain crypto asset issuances from the full securities registration requirements.

Financing Exemptions and Feedback After the Deadline

According to the encryption rules proposed by SEC, eligible domestic issuers in the United States will be able to obtain new financing exemptions. Qualified startups can raise up to $5 million within four years through one of these pathways; another option allows issuers to raise up to $75 million within 12 months, but they will have to undertake additional obligations regarding information disclosure and financial reporting.

Both of these exemptions are not currently in effect. The proposal also includes a safe harbor arrangement to determine when a certain crypto asset is no longer associated with an investment contract.

The official period for soliciting opinions has ended on October 20, 2026. SEC indicates that public opinions will continue to be accepted after the deadline.

This article was generated with the assistance of artificial intelligence and has been reviewed by an editorial team.