- Ripple has proposed a new legal framework to the SEC, urging clearer guidelines on when crypto assets should no longer be classified as securities.
- The company advocates for a “maturity” test and legislative action, emphasizing that well-established tokens should not face unnecessary regulatory burdens.
Ripple is making waves once again—this time not with its token XRP, but with a bold challenge to the U.S. Securities and Exchange Commission (SEC). In a newly submitted legal framework, the company is pushing for sweeping regulatory clarity that could redefine how crypto assets are treated under U.S. law.
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A Fresh Legal Framework for Crypto
On May 27, Ripple formally presented a detailed letter to the SEC following a meeting with the agency’s Crypto Task Force. The letter, signed by Ripple’s top legal executives, calls for a framework that more accurately reflects the nature of modern crypto markets.
Citing the 2023 SEC v. Ripple Labs ruling—where Judge Analisa Torres ruled that XRP is not a security when traded on secondary markets—Ripple argues that the SEC applies an outdated approach. The firm asserts that tokens evolve over time and should not remain classified as securities indefinitely.
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Ripple Introduces the “Maturity” Test
To address the gray area around crypto regulation, Ripple proposes a “maturity” test. This concept would determine when a token has sufficiently evolved to no longer fall under securities laws. Ripple claims this test is a better alternative to the vague and often inconsistent decentralization criteria that have long puzzled regulators and courts alike.
Under the proposal, a digital asset would be considered “mature” if no material promises from its issuer remain and if subsequent token holders have no enforceable rights tied to the original investment. In such cases, Ripple argues, continued SEC oversight would be unnecessary.
Advocating for Safe Harbors and Legislative Action
Ripple also recommends creating a safe harbor for developers and projects that operate transparently and in good faith. These protections would help encourage innovation while offering clear guidelines for compliance.
Importantly, Ripple’s letter asserts that it is not the SEC’s job to invent new legal standards. That role belongs to Congress. Without proper legislative authority, the SEC should refrain from imposing new obligations on crypto tokens already trading openly in established markets.
Ripple concludes that digital assets integrated into the broader financial system and operating in transparent, liquid environments no longer present the investor risks that securities laws aim to address.
With this bold proposal, Ripple is calling for a major shift—one that could finally bring regulatory clarity to the rapidly evolving crypto space.
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