Ripple Backs the SEC’s New Crypto Rulebook After a $150 Million Legal Fight

One of the crypto industry’s most unlikely endorsements landed on October 20. Ripple, the company that spent more than $150 million fighting the US Securities and Exchange Commission in a lawsuit that began in December 2020, formally backed the regulator’s proposed Regulation Crypto Assets in a 20-page comment letter. Chief Legal Officer Stuart Alderoty shared the filing on X the same day it was submitted — the final day of the formal comment period (File No. S7-2026-27) — and argued that the SEC has clear authority to adopt the rule. The subtext is remarkable: the company that became the symbol of Washington’s war on crypto is now asking the SEC to finish the rulebook.

The proposal, published on August 18, 2026, creates a tailored offering regime for certain investment contracts involving crypto assets. It sets out two registration exemptions: startups could raise up to $5 million over four years under a one-time startup exemption, while larger issuers could raise up to $75 million within 12 months, subject to tiered disclosure and financial-reporting conditions. Issuers using either path would remain subject to federal antifraud and antimanipulation rules, and a conditional safe harbor would let a crypto asset be deemed no longer subject to an investment contract once the issuer has completed the managerial efforts it promised buyers. Nothing is in force yet — the proposal carries no announced timeline for a final decision.

The most consequential line of the letter is philosophical. Ripple argues that the investment contract, not the token itself, is the security — and that the Supreme Court’s 1946 Howey test should track the life of an issuer’s specific promises, ending when those obligations are fulfilled, abandoned or terminated. It explicitly declines to endorse a separate decentralization test: decentralization can be measured by governance participation, node distribution, software contributions or economic control, the company notes, and none of those measures reliably shows whether an issuer’s commitments are still in place. The industry endorsement is broad: the Blockchain Association backed the framework while asking the startup ceiling to be doubled to $10 million, and the foundations behind Cardano, Chainlink, Hedera, Stellar, Aptos and Avalanche signed a joint letter of support.

Why this matters: for half a decade the US effectively regulated crypto through lawsuits — what Alderoty calls “case by case, coin by coin” enforcement — a pattern Ripple says pushed innovation abroad. That era may be closing from two directions at once. While the SEC moved toward a securities rulebook, the Commodity Futures Trading Commission is exploring its own two-pronged plan after Congress failed to pass the CLARITY Act in its September vote: Regulation Crypto Asset Transactions (CTX), which would give retail investors a route to trade spot crypto with margin and leverage, and Regulation Crypto Asset Markets (CAM), a federal registration pathway for exchanges that could replace the state-by-state licensing patchwork platforms like Coinbase and Kraken navigate today. CFTC Chairman Michael Selig has signalled the agency will use its existing authority rather than wait for Congress — though both initiatives remain at an early stage.

What to watch next: whether the SEC finalizes Regulation Crypto Assets and how the exemptions change in the final version; whether CTX and CAM advance past the talking stage; and whether customer-protection rules written with FTX’s collapse in mind can keep pace with leveraged products. The market backdrop is constructive — Bitcoin held above $82,500 on October 21 and US spot Bitcoin ETFs drew $526.7 million of inflows on October 19, their strongest day in nearly a month. The lesson for investors is the oldest one in markets: rules change the playing field, but position sizing decides the outcome. Our free forex course teaches risk management that applies to any market, and the forex tools page has position-size calculators for planning trades. (Not financial advice.)