Ripple, the company behind the XRP cryptocurrency, is asking the U.S. Securities and Exchange Commission (SEC) to revise proposed rules governing digital assets. The company’s submission comes after years of litigation with the SEC over whether XRP should be classified as a security, a case that influenced the broader debate over cryptocurrency regulation.

The SEC is developing a new regulatory framework for crypto assets. Drawing on its experience as a defendant in one of the most closely watched crypto legal disputes in U.S. history, Ripple submitted comments asking the agency to change how the proposed rules would apply to digital-asset companies. Reports on Ripple’s participation in the SEC’s rulemaking process say the company is seeking clearer definitions and compliance standards that are more workable than those currently proposed.

Ripple’s Legal Experience and Its Policy Position

The SEC sued Ripple Labs in December 2020, alleging that the company had conducted an unregistered securities offering through the sale of XRP tokens. The lawsuit left the legal status of one of the largest cryptocurrencies by market value uncertain for several years.

In July 2023, U.S. District Judge Analisa Torres issued a landmark ruling in the case. She found that XRP sales to retail investors on public cryptocurrency exchanges did not constitute securities transactions. However, she ruled that Ripple’s direct institutional sales of XRP to sophisticated investors qualified as securities offerings.

The split decision was significant for the wider digital-asset industry. It was the first major court ruling to draw a clear distinction between different types of crypto-token sales and how securities law applies to each category. Ripple came out of the case with a partial victory and a detailed understanding of the boundaries regulators and courts had drawn.

As the SEC develops formal crypto rules, Ripple is using that experience to argue for a framework that reflects the technical characteristics of digital assets. The company’s position is that broad rules designed for traditional securities markets may not apply cleanly to decentralized tokens traded on public exchanges. The definitions at stake are consequential because they determine which transactions fall under securities registration and disclosure requirements — the same question that anchored the Ripple litigation.

Potential Effects on Crypto Businesses

If adopted in their current form, the proposed SEC rules could affect how crypto businesses in the United States their operations and meet disclosure requirements. Companies that issue tokens, operate exchanges, or facilitate digital-asset transactions could face new compliance obligations.

Ripple has argued that rules developed without input from companies that have litigated these issues could create confusion instead of clarity. It also contends that poorly defined requirements may result in inconsistent enforcement. Such uncertainty can be particularly difficult for smaller firms, which generally have fewer legal resources to challenge ambiguous allegations.

For XRP, any regulatory result will depend on the final rules adopted by the SEC. The rulemaking process includes a public-comment period, allowing the agency to revise its proposal before it becomes binding. Ripple’s submission is part of that formal process and does not guarantee a specific outcome.

At the same time, Ripple has continued developing products and partnerships while pursuing its policy objectives. The company recently reached an agreement with Cross River to integrate its RLUSD stablecoin into core banking infrastructure. The arrangement would place Ripple’s regulated digital-dollar product in more traditional financial systems.

Ripple has also partnered with Stripe’s Privy to enable XRP payments in consumer applications. In addition, the company is developing XRP Ledger embedded wallets through its partnership with Privy. These initiatives represent Ripple’s continuing efforts to build payment and financial infrastructure while the regulatory debate remains unresolved.

Those commercial activities are relevant to Ripple’s policy arguments because they provide examples of digital-asset products designed for practical financial use. The company can point to those use cases when arguing that overly restrictive rules could affect operating financial products, rather than only speculative trading.

Implications for XRP Holders

The SEC’s proposed rules are not final, and U.S. cryptocurrency regulation remains under development. The public-comment process gives companies, developers, and other participants a formal opportunity to identify potential problems before any rules take effect. Federal rulemaking of this kind can extend over months or longer, leaving a substantial window between a proposal and any final text.

Ripple’s participation reflects the company’s effort to pursue a regulated framework for crypto assets rather than operate in an undefined regulatory area. However, its comments do not determine the SEC’s final decision, and proposed regulatory outcomes remain uncertain until final rules are published and interpreted by the courts. As the process advances, one marker to watch is how any final definitions treat the retail-versus-institutional distinction that emerged from Judge Torres’s 2023 ruling.

The combination of Ripple’s legal engagement and product development illustrates how major cryptocurrency companies are responding to the current U.S. regulatory environment. Ripple’s position in the SEC rulemaking process is shaped directly by its years of litigation over XRP, giving the company a distinct perspective on how securities regulations may apply to digital assets.

This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital-asset markets carry significant risk. Readers should conduct their own research before making decisions.