Ripple has formally asked the US Securities and Exchange Commission’s Crypto Task Force to adopt a legal framework that would allow tokens such as XRP to fall outside securities law once an issuer’s original fundraising obligations have ended.
In a 9 January letter to the SEC, Ripple argued that crypto regulation should follow “the lifespan of the obligation”, not permanently attach securities status to a token simply because it was once sold in a capital-raising transaction.
The request comes as Congress prepares to finalize market-structure legislation and the SEC, under Chair Paul Atkins, begins rewriting its crypto rulebook through its new Crypto Task Force.
The legal framework Ripple is pushing
At the center of Ripple’s submission is a bright-line distinction between a securities transaction and the asset that trades afterwards.
Ripple argues that securities law should only apply where there is privity — a direct legal relationship between the issuer and buyer in a primary sale that creates enforceable rights and obligations.
Once that relationship ends, the token should no longer be subject to securities jurisdiction.
Ripple warned that treating every issuer sale as a permanent capital raise leads to what it calls the “zombie promise” problem, where decades-old statements are deemed legally binding on secondary-market buyers who never saw them.
In mature markets, such as crypto exchanges, Ripple argues that commodity-style rules, rather than securities law, should govern trading.
This is because buyers are relying on liquidity, price discovery, and utility rather than issuer promises.
Why this matters for XRP
Ripple’s position directly reflects its multi-year legal battle with the SEC over whether XRP is a security.
The SEC’s original lawsuit was based on the idea that Ripple’s sales of XRP created an ongoing investment contract.
Ripple is now arguing that even if XRP was once distributed through securities-like transactions, the token itself should not carry permanent securities status once those promises expire.
Under Ripple’s framework, XRP would be regulated only when Ripple itself is making enforceable commitments, not when the token trades between third parties on exchanges.
That would embed Ripple’s courtroom defense into federal policy.
Why the timing matters
The US crypto regulatory system is shifting rapidly. Congress has already passed the GENIUS Act on stablecoins and is preparing comprehensive market-structure legislation for early 2026.
Meanwhile, the SEC has launched Project Crypto to transition from an enforcement-first approach to formal rulemaking.
Ripple is positioning XRP inside that new framework before the rules are finalized.
Final Thoughts
- Ripple is seeking a legal standard that would permit crypto tokens to be traded as non-securities once the original fundraising obligations have been fulfilled.
- The framework could permanently remove XRP and many similar tokens from SEC securities jurisdiction.
