SEC Crypto Rule Draws Ripple Support and Public Citizen Opposition

Ripple backed the SEC’s proposed Regulation Crypto Assets framework in a comment filed Oct. 20. The filings present opposing views as the SEC considers how the framework should treat crypto-related investment contracts and offerings.

Ripple argued that an investment contract involving a crypto asset can be a security without making the asset itself a security. Its position applies the Howey test to the investment contract rather than treating the asset alone as the security.

The proposal includes exemptions for offerings of up to $5 million over four years and $75 million in each 12-month period. The Stellar Development Foundation separately endorsed a coalition request to include the SEC’s digital commodity treatment in the rule text.

Public Citizen argued that the exemptions and safe harbor would weaken investor protections and urged the SEC to withdraw the proposal. The SEC issued the rule proposal Aug. 18. The comment period closed Oct. 20, and the rule remains proposed.