XRP: Ripple Challenges SEC Over Securities Definition

XRP is once again at the center of a significant regulatory debate as Ripple presses the U.S. Securities and Exchange Commission (SEC) to clarify when a cryptocurrency ceases to be considered a security.

Ripple’s Chief Legal Officer, Stuart Alderoty, made headlines by revealing that the company submitted a formal letter to the SEC’s Crypto Task Force. This move comes as part of Ripple’s ongoing effort to define more precisely the point at which a digital token transitions from a security to a non-security asset. The latest communication follows a speech by SEC Commissioner Hester Peirce, calling for a revised regulatory framework for digital assets—something Ripple is echoing with urgency.

The crux of Ripple’s argument lies in the “maturity” of a crypto token. Their latest letter argues that most fungible cryptocurrencies, including XRP, can evolve beyond their original investment contract context. Once they reach wider circulation and adoption on secondary markets, these assets no longer retain traits that typically define securities. Ripple refers to the landmark 2023 ruling by Judge Torres, which concluded that retail XRP sales on exchanges did not constitute securities—although institutional sales were still deemed questionable.

Ripple’s legal team proposes the SEC adopt a refined approach based on market behavior and asset decentralization rather than blanket classifications. The company suggests a “maturity” test could serve as a critical tool for determining when a token should shed its initial security label. This would be especially significant for assets like XRP that have matured into widely traded digital currencies used for real-time finance and cross-border settlements.

Beyond Ripple’s regulatory challenges, the crypto landscape at large is witnessing notable developments. Coinbase announced upcoming delistings of four digital assets: Render (RNDR), Ribbon Finance (RBN), Helium Mobile (MOBILE), and Synapse (SYN). The suspension of these tokens—scheduled for June 26, 2025—is attributed to significant updates in their protocols that rendered their earlier versions incompatible with Coinbase’s listing standards.

The exchange clarified that trading for these tokens will halt across all platforms including Coinbase.com, Coinbase Exchange, and Coinbase Prime. Ahead of the actual trading suspension, the order books for the affected cryptocurrencies are already in limit-only mode. This allows users to manage pending limit orders while preventing new market orders from executing.

Meanwhile, a striking reversal in regulatory tone is emerging in India. After years of stringent tax policies and calls for crypto bans, the Indian government appears to be warming up to the digital asset sector. The shift is said to be influenced in part by trade negotiations with the United States. Policymakers are now reportedly engaging in open dialogues with industry stakeholders and revisiting harsh tax rules that have previously curtailed innovation.

In February, India had enforced a 30% capital gains tax on all crypto earnings—a move that received strong backlash from both international and domestic entities. Though the tax reform remains in place, the government’s new openness may represent a pivotal turning point for the country’s fintech ecosystem.

Ripple advocates argue that these global regulatory movements highlight the need for consistent and rational digital asset laws. With multiple jurisdictions like India reevaluating their crypto stance, Ripple insists that the U.S. must similarly adapt its outdated regulatory positions.

In its latest message to the SEC, Ripple emphasizes that existing securities laws can and should be applied with more nuance. Instead of relying solely on Howey Test interpretations, Ripple recommends a dynamic framework that considers how an asset functions in the real economy. Their proposed “maturity” model could help streamline the currently vague classification of tokens and offer clearer guidance to innovators and investors alike.

Related: Expert Advice: Sell XRP If You’re Confused

With XRP becoming emblematic of the broader regulatory debate, the industry waits keenly for the SEC’s eventual response. Whether Ripple’s persistence leads to meaningful policy changes or stalls in bureaucratic inertia will have lasting implications for how digital assets are treated in the world’s largest capital market.