Ripple backs crypto fundraising exemptions of up to $75 million
Key Facts
Ripple urged the U.S. Securities and Exchange Commission to adopt a proposal allowing offerings of investment contracts linked to crypto assets, with a fundraising exemption capped at $75 million in each 12-month period. The company set out its position in a formal comment letter dated October 20, 2026, supporting adoption of the proposal as a final rule. The framework targets certain offerings of investment contracts linked to crypto assets through registration exemptions and a conditional safe harbor. The proposal pairs access to funding with disclosure and investor protection requirements, according to the SEC's statement and accompanying fact sheet. Ripple coupled its support with requests for changes concerning how an asset's legal status is determined and the implications of filing a transition form.
Ripple's central request is to establish that legal rules determine an asset's status regardless of whether the form is filed. The company said in its letter: "The law, not the filing of a form, determines legal status." It requested language specifying that failure to file a transition form does not create a presumption that an asset is subject to an investment contract. The change sought by the company concerns the legal effect of the form's absence, alongside its support for adoption of the proposed framework. Its letter referred in this context to the joint interpretation of the application of securities laws to certain types of crypto assets and transactions involving them.
On project financing, the proposal includes a startup exemption allowing offerings of up to $5 million over a 4-year period, according to the SEC's record. This route sits alongside the fundraising exemption, which includes tiers with different limits and associated financial disclosure requirements. The first tier of the fundraising exemption permits offerings of covered investment contracts worth up to $20 million over 12 months, according to the fact sheet. The higher tier requires the financial statements included in the offering statement to be audited, according to the full proposal. The framework thus ties audit requirements to the tier an issuer uses when offering contracts to raise funding.
Users of the fundraising exemption must provide financial statements and comply with ongoing reporting requirements, according to the statement announcing the proposal. Both exemptions also require principles-based narrative disclosures to investors as part of the conditions for conducting offerings. The framework also proposes preempting registration and qualification requirements under state securities laws for eligible offerings. This provision extends to certain secondary market transactions, within the scope specified by the SEC in its statement. Issuers using the exemptions remain subject to the anti-fraud and anti-manipulation provisions of federal securities laws, according to the fact sheet.
The proposed safe harbor is tied to conditions concerning the essential managerial efforts the issuer promised to undertake, according to the SEC's full text. To use this route, the issuer must have completed those efforts or permanently ceased them. The safe harbor also requires public disclosure, according to the fact sheet published with the proposal. The disclosure must include a statement that the safe harbor's conditions have been met, alongside an analysis supporting that statement. The requirements for this route thus combine the status of the managerial efforts the issuer committed to undertake with a declaration that the conditions have been met and supporting analysis.
The SEC issued the proposal on August 18, 2026, according to its rulemaking record. As part of the comments submitted on it, Hedera sent a separate letter dated October 7, 2026, which the SEC published in the proposal's docket. Ripple's letter was issued by the company alone, setting out its position on the framework and the changes it requested. Ripple called for the rulemaking process to conclude with adoption of the proposal in its final form. The SEC's record set October 20, 2026, as the deadline for public comments, the same date as the company's letter.