Ripple Asks SEC: When Does a Token Stop Being a Security?

Ripple has urged the SEC to clarify when a digital asset, initially sold under an investment contract, should no longer be treated as a security. Citing Judge Torres’ 2023 ruling that XRP is not a security on secondary markets, Ripple proposes a “maturity” test—based on market cap, decentralization, and network openness—to determine a token’s status.

The company criticized the SEC’s vague guidance and called for legal clarity, also supporting a safe harbor for good-faith actors.

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Source: https://www.sec.gov/files/ctf-written-input-ripple-052725.pdf