Ripple Labs Inc. urged the U.S. Securities and Exchange Commission to advance its proposed crypto offering rules while clarifying how exchanges can use issuer filings to assess a token’s connection to an investment contract.
In an Oct. 20 comment, Ripple argued that securities law should distinguish the investment contract involved in a transaction from the token used in it. Ripple asked the SEC to explain how exchanges and other intermediaries may rely on Form TR, a proposed filing marking the end of an issuer’s promised managerial efforts. Ripple also sought separate revisions affecting some broker-dealer trades in secondary markets.
The request builds on Ripple’s earlier push for changes to the SEC proposal. The SEC proposed Regulation Crypto Assets on Aug. 18. The plan would let eligible issuers raise up to $5 million over four years under a startup exemption. Under a separate exemption, issuers could raise no more than $20 million in Tier 1 or $75 million in Tier 2 over 12 months.
Issuers using either route would face disclosure requirements and federal antifraud and antimanipulation rules. Issuers in both tiers would file financial statements and continuing reports; Tier 2 statements would also need an audit.
Ripple cited its earlier legal dispute with the SEC and said it spent more than $150 million in legal fees seeking clarity about its obligations. The company said case-by-case enforcement had left firms uncertain about how rules applied and encouraged crypto activity to move overseas.
Public Citizen opposed the proposal in its own Oct. 20 comment, urging the SEC to withdraw it. The group argued that the exemptions and a proposed safe harbor could weaken protections for retail investors.
The public comment deadline has passed. The SEC has not announced a date for a final decision.
