The letter was signed by Ripple Chief Legal Officer Stuart Alderoty, General Counsel Sameer Dhond, and Deputy General Counsel Deborah McCrimmon. In the letter, Ripple argues that securities oversight should apply only for the duration of enforceable promises tied to a transaction. The company writes:
“The Commission’s jurisdiction should track the lifespan of the obligation; regulating the ‘promise’ while it exists, but liberating the ‘asset’ once that promise is fulfilled or otherwise ends.”
“The dispositive factor is the holder’s legal rights, not their economic hopes. Without that bright line, the definition of a security, and the SEC’s jurisdictional limits, become amorphous and unbounded,” Ripple added.
The submission explains that collapsing the distinction between a transaction and the underlying asset risks expanding securities jurisdiction indefinitely and criticizes approaches that rely on decentralization, trading behavior, or ongoing development as legal substitutes.
“Any framework that classifies an asset as a security merely because the holder hopes for a ‘passive’ price increase ignores the reality that speculation is a feature of all markets, security and non-security markets alike.”
FAQ ⏰ Why did Ripple write to the SEC Crypto Task Force? Ripple urged the SEC to adopt a rights-based framework that limits securities oversight to enforceable legal obligations. What does Ripple say determines whether a crypto asset is a security? Ripple argues the determining factor is the holder’s legal rights, not price speculation or market activity. How does Ripple view speculation in crypto markets? Ripple says speculation exists in all markets and does not by itself create a securities relationship. What risk does Ripple warn about in current SEC approaches? Ripple warns that blurring transactions and assets could expand SEC jurisdiction indefinitely.
