Ripple Calls for Clearer SEC Crypto Rules and XRP Trading Protections

Ripple has called on the U.S. Securities and Exchange Commission (SEC) to clarify cryptocurrency trading protections under its proposed regulatory framework. According to Ripple’s October 20 comment letter, the company supports registration exemptions but wants clearer rules governing investment contracts and secondary-market transactions.

Ripple Chief Legal Officer Stuart Alderoty confirmed the submission on X, referencing the company’s $150 million legal expenses during its concluded SEC lawsuit. The company argues that cryptocurrency businesses need predictable regulations to avoid costly disputes over federal securities obligations.

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Ripple’s recommendations emphasize separating cryptocurrency tokens from investment contracts that qualify as securities under federal law. The company maintains that issuing tokens through investment contracts does not automatically classify the underlying digital assets as securities.

Its position draws on the Supreme Court’s Howey test, which examines the circumstances surrounding investment arrangements. Significantly, Ripple opposes making decentralization an independent requirement for determining when securities obligations have ended.

Instead, regulators should examine whether issuers have fulfilled or permanently withdrawn their original commitments to investors. Ripple also supports proposed safe harbor provisions allowing issuers to establish when essential managerial activities have ended. Additionally, the company wants exchanges and brokers to rely on Form TR filings when assessing cryptocurrency trading obligations.

The SEC’s proposed Regulation Crypto Assets introduces two fundraising exemptions for qualifying cryptocurrency investment contracts. One pathway would permit eligible startups to raise $5 million over four years without traditional securities registration.

Another exemption would allow qualifying issuers to raise $75 million within 12 months, subject to additional disclosure requirements. Ripple supports these provisions while requesting stronger protections for secondary-market transactions involving tokens separated from investment contracts.

The company also wants Rule 500 clarified to prevent ordinary cryptocurrency trading from inheriting obligations tied to earlier offerings.w Neither exemption has entered into force, as the SEC must complete its regulatory review before adopting final rules.

As reported by36Crypto, Ripple Chief Legal Officer Stuart Alderoty has also urged the U.S. Treasury to strengthen stablecoin consumer protections. Serving as National Cryptocurrency Association president, Alderoty submitted recommendations addressing Section 3 regulations under the GENIUS Act.

The association wants regulators to protect consumers from losing stablecoin access when issuers encounter licensing difficulties. Additionally, the NCA supports requiring issuers to maintain reserves covering 100% of their outstanding stablecoins.

Its recommendations address redemption rights, stolen asset recovery, and protections for consumers using personal cryptocurrency wallets. These proposals address consumer safeguards alongside Ripple’s broader efforts to establish clearer cryptocurrency regulations.

Ripple’s recommendations reflect its previous legal battle with the SEC, which officially concluded in August 2025. Both parties agreed to dismiss their appeals, ending litigation that began in December 2020 over XRP sales.

The resolution preserved a July 2023 federal court ruling distinguishing institutional XRP sales from certain secondary-market transactions. Ripple also remained subject to a $125 million civil penalty and an injunction over securities-registration violations.

Meanwhile, Alderoty revealed that Ripple spent more than $150 million defending itself throughout the dispute. Ripple maintains that formal regulations would provide greater stability than enforcement policies that future SEC leadership could reverse. The SEC’s public comment period closed October 20, leaving the proposed framework subject to further review and possible amendments.

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