Ripple urged the SEC in a Jan. 9 letter to establish a clear legal distinction between securities offerings and underlying tokens in secondary markets, a framework that would directly affect how XRP is regulated following the company's prolonged legal battle with the agency.
What Happened: Token Classification Push
The letter, signed by Chief Legal Officer Stuart Alderoty, General Counsel Sameer Dhond, and Deputy General Counsel Deborah McCrimmon, was addressed to the SEC's Crypto Task Force as part of ongoing rulemaking discussions.
Ripple argued that regulators should abandon "decentralization" as a legal metric because it creates "intolerable uncertainty" with both "false negative" and "false positive" outcomes.
The company referenced earlier submissions from Mar. 21, 2025 and May 27, 2025, along with the House's CLARITY Act of 2025 and Senate discussion drafts.
Ripple contends that classification decisions will directly shape "jurisdiction, disclosures, and secondary-market treatment."
The most significant passage argues that SEC jurisdiction should be "time-bound to the lifespan of the obligation" rather than treating tokens as permanently labeled securities: "The Commission's jurisdiction should track the lifespan of the obligation; regulating the 'promise' while it exists, but liberating the 'asset' once that promise is fulfilled or otherwise ends."
Why It Matters: Legislative Deadline
The letter arrived less than a week before a Jan. 15 markup on comprehensive digital-asset market structure legislation in the US Senate Banking Committee.
Ripple still holds a substantial portion of all XRP in escrow while its developer arm RippleX continues contributing to the XRP Ledger.
The company explicitly rejected the notion that active secondary trading should serve as a jurisdictional hook, comparing crypto markets to spot commodities like gold and silver.
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