Ripple urges SEC to separate crypto regulation from securities law based on legal rights

On January 9, Ripple submitted a letter to the U.S. SEC Crypto Task Force, proposing a rights-based framework for digital asset regulation instead of relying on market activity, speculation, or technological design. Ripple argues that securities laws should apply only to enforceable promises tied to a transaction and end once those promises are fulfilled.

The letter was signed by Chief Legal Officer Stuart Alderoty, General Counsel Sameer Dhond, and Deputy General Counsel Deborah McCrimmon. Ripple emphasized: “The decisive factor is the holder’s legal rights, not their economic hopes. Without this bright line, the definition of a security and the SEC’s jurisdiction become amorphous and unbounded.”

Ripple also criticized approaches that treat decentralization, trading behavior, or ongoing development as substitutes for legal obligations. The company stressed that passive speculation alone does not create a security: “What distinguishes a security is a legal claim on the enterprise—such as rights to dividends, revenue shares, liquidation proceeds, or ownership—not simply the hope of price appreciation.”

The letter compares crypto markets to commodities and consumer goods that trade actively without triggering securities laws and supports fit-for-purpose disclosures where direct promises or retained control exist, while noting that fraud and market manipulation can still be addressed under existing enforcement authorities.