Ripple backs SEC crypto rule after $150M legal fight, seeks key changes

Ripple's position follows the SEC's 2020 lawsuit alleging that XRP sales were unregistered securities offerings, a case that dragged through federal court for years under a 'regulation by enforcement' approach associated with former Chair Gary Gensler. Ripple says that fight cost it $150 million. The SEC has now proposed Regulation Crypto Assets, its first attempt at a dedicated rulebook rather than case-by-case litigation against individual firms.

If finalized, the rule would give token issuers, exchanges and trading platforms defined criteria for when a crypto asset counts as a security, what issuer promises trigger that status, and how secondary trading should be treated. Projects that have operated in legal gray zones would need to restructure disclosures or offerings to fit the new categories. Firms able to meet clear standards gain predictability; those relying on ambiguity to avoid registration lose that cover. (per cryptopotato.com)

Ripple's push for rulemaking over enforcement raises a fair question about whose interests it serves: a company that just spent years and $150 million fighting the SEC has an obvious stake in rules that look more favorable than the agency's prior litigation posture. The SEC must still balance that industry pressure against its stated mandate to protect investors, since clearer rules can either tighten or loosen the practical bar issuers must clear. (per u.today)

The outcome hinges on whether the SEC moves Regulation Crypto Assets from proposal to final rule, and on what changes it makes to the comment-letter demands Ripple and others have filed. A finalized rule with firm definitions for token securities and trading would end years of ad hoc enforcement; a delayed or narrowed version would leave issuers back in the uncertainty Ripple says it fought to escape.