In a letter dated January 9, **Ripple** urged the SEC to establish a legal framework clearly distinguishing between secondary market securities offerings and underlying tokens. This framework will directly impact how **XRP** is regulated following the long-term litigation with the SEC.
What happened: Issue raised regarding token classification
This letter was submitted signed by Stuart Alderoty, Chief Legal Officer, Sameer Dhond, Global General Counsel, and Deborah McCrimmon, Deputy Global General Counsel, and delivered to the SEC's Cryptocurrency Task Force as part of ongoing rulemaking discussions.
Ripple argues that regulatory authorities should abandon the concept of 'decentralization' as a legal standard, as it leads to 'unacceptable uncertainty' and produces both 'false negatives' and 'false positives.'
The company cites its previous submissions on March 21, 2025, and May 27, 2025, and also references the CLARITY Act of 2025 introduced in the House and the draft discussions in the Senate.
Ripple contends that the classification decision will directly determine 'jurisdiction, disclosure requirements, and treatment in the secondary market.'
The core of Ripple's argument is that SEC's jurisdiction should be limited to the duration of the obligation, rather than treating the token as a security indefinitely. In other words, 'the Commission's jurisdiction should be tied to the life of the obligation—regulating the 'promise' while the obligation exists, but releasing the 'asset' once the promise is fulfilled or terminated.'
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Why it matters: Legislative deadline
This letter was submitted less than a week before the January 15 markup (clause review) of a comprehensive bill on digital asset market structure by the US Senate Banking Committee.
Ripple continues to hold a significant portion of the total XRP supply in escrow, and RippleX, the development arm, continues to contribute to the XRP Ledger ecosystem.
Ripple explicitly drew a line, stating that active trading in the secondary market should not serve as the basis for SEC jurisdiction. By likening the cryptocurrency market to a physical commodities market like gold and silver, Ripple argued that mere trading activity should not trigger securities regulation.
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