Ripple urges SEC to finalize crypto rules, clarify when tokens cease to be securities

Ripple Labs has urged the US Securities and Exchange Commission (SEC) to finalize its proposed Regulation Crypto Assets framework, arguing that digital assets should not remain subject to securities laws indefinitely because of their original investment arrangements. In an October 20 letter, the company expressed support for the proposal while requesting additional clarity on how investment contracts end, how crypto assets are classified, and how exchanges and other intermediaries can operate under the framework. Ripple argued that an investment contract involving a cryptocurrency does not automatically make the underlying token a security. Instead, the company’s position is that securities obligations should depend on the issuer’s promises to investors and whether those obligations remain in effect. The filing also supports replacing regulatory uncertainty and enforcement actions against individual companies with rules that apply consistently across the crypto industry. Ripple seeks clearer rules for token classifications Ripple said the SEC’s framework should recognize that investment contracts can end once an issuer fulfills or permanently ceases the essential managerial activit...