Ripple's Legal Chief Outlines Principles SEC Can't Afford to Repeat in 2025

Ripple’s legal chief has issued a year-end warning to the SEC, highlighting key legal boundaries on crypto assets and cautioning against regulatory overreach in 2025.

Year-End Message: Ripple’s Legal Chief Warns SEC Against Repeating Missteps in 2025

Ripple’s chief legal officer, Stuart Alderoty, took to social media platform X on Dec. 31 to highlight key legal principles regarding the U.S. Securities and Exchange Commission’s (SEC) jurisdiction over securities. He addressed the boundaries of the SEC’s oversight, underscoring that its authority applies strictly to securities transactions and not to asset sales without post-sale rights or obligations. His comments aimed to clarify misunderstandings around the classification of digital tokens and the scope of regulatory authority.

The Ripple legal chief used a straightforward analogy to illustrate the difference between securities and asset sales. “Selling a gold bar with a contractual right, title, or interest in my gold mine? Likely a security transaction. Selling that same gold bar without post-sale rights or obligations? Just an asset sale—the SEC can’t police it,” he wrote. Alderoty emphasized:

The SEC’s reach doesn’t expand based on a self-serving view of who it thinks is more ‘deserving’ of disclosures.

His remarks suggested that the SEC’s authority cannot be arbitrarily extended based on subjective interpretations, reinforcing the need for consistent adherence to legal definitions in determining what falls under securities regulations.

In discussing digital assets, Alderoty made a clear distinction between the nature of tokens and the transactions involving them. “A token is never a security, although it can be the subject of a security transaction,” he stated. This underscored Ripple’s long-standing position that the underlying asset itself should not automatically be classified as a security.

Alderoty also rejected the idea that tokens could change their classification over time, describing this belief as legally unfounded. He stressed:

The notion that a token can ‘evolve’ from a security to a non-security is a made-up fallacy with no footing in the law.

By addressing these points, Alderoty reinforced Ripple’s legal stance in ongoing debates surrounding token regulation. “Let’s hope these principles won’t need repeating in 2025 and beyond,” the Ripple legal chief noted.