Ripple Submits Supplemental Letter to SEC Discussing the Separation of Digital Assets from Investment Contracts

Ripple's Chief Legal Officer Stuart Alderoty announced that Ripple has submitted a supplemental letter to the U.S. Securities and Exchange Commission (SEC) cryptocurrency task force, focusing on the issue of when digital assets can be separated from investment contracts. This move responds to questions raised by SEC Commissioner Peirce in her "New Paradigm" speech.

In the letter, Ripple cited legal analysis from 2022 and the ruling in the 2023 SEC vs. Ripple Labs case, emphasizing that XRP itself is not a security and arguing that most crypto assets should not be considered securities in secondary market transactions. Ripple also suggested that the SEC introduce a "safe harbor" mechanism to provide clearer compliance guidance for market participants and proposed criteria based on network maturity to help clarify which digital assets have separated from investment contracts.

Ripple expressed hope that ongoing dialogue with the SEC will promote transparency and clarity in crypto market regulations, providing a clearer direction for industry development.