- Ripple has filed a new letter with the SEC questioning when a crypto asset like XRP stops being considered a security.
- The company proposes a maturity-based regulatory framework and reaffirms that XRP’s secondary market sales should not be classified as securities.
Ripple Asks the SEC the Big Question
In a move that could reshape how regulators view cryptocurrencies, Ripple Labs has filed a new letter with the U.S. Securities and Exchange Commission (SEC), raising a vital question: When does a crypto asset, initially sold under an investment contract, stop being a security? This filing, submitted on May 27, 2025, builds upon a key meeting between Ripple and the SEC’s Crypto Task Force earlier in the month.
The timing is crucial, as it coincides with Commissioner Hester Peirce’s recent “New Paradigm” speech advocating for more nuanced regulation of digital assets.
XRP Is Not a Security—Ripple Reaffirms With Case Law
Ripple’s letter leans heavily on legal precedent, especially the groundbreaking 2022 paper The Ineluctable Modality of Securities Law and the pivotal July 2023 ruling by Judge Analisa Torres. In that case, the judge found that while Ripple’s institutional sales may have involved investment contracts, secondary market transactions of XRP did not.
The distinction here is key: Ripple is arguing that XRP itself is not a security—only some past sales may have been. By invoking these rulings and academic support, Ripple seeks to reinforce that fungible digital assets traded in secondary markets should not be blanketed as securities.
A “Maturity” Metric Could Redefine Crypto Regulation
Ripple is now pushing for a new framework—one that uses maturity instead of decentralization as the determining factor in how digital assets are regulated. The company suggests criteria such as network independence, market cap, and operational longevity to decide whether an asset like XRP still requires SEC oversight.
This approach could offer a more measurable and transparent standard for regulators, avoiding the often subjective and inconsistent application of decentralization.
Ripple Pushes Back on Misleading Disclosures
Another key concern? Ripple warns that forcing disclosure requirements for non-securities could confuse the public, falsely implying that these assets are still under issuer control. With XRP already battling centralization misconceptions, unnecessary regulations could further muddy the waters.
As Ripple’s legal standoff with the SEC continues, this new filing signals the company’s intent to not only defend XRP but also influence broader crypto policy. The message is clear: it’s time for regulators to evolve alongside the technology.
