Ripple Defends XRP Status Against SEC Classification

TLDR

• Ripple argues XRP is not a security in secondary markets.
• Legal precedents support Ripple’s stance on digital asset classification.
• Ongoing debate affects regulatory clarity for all cryptocurrencies.

Ripple’s Chief Legal Officer, Stuart Alderoty, addressed ongoing criticisms regarding XRP’s regulatory classification. The criticisms come primarily from a faction of Bitcoin advocates, commonly referred to as “Bitcoin Maxis.” These advocates assert that XRP should be treated as a security rather than a commodity, which remains a contentious aspect of Ripple’s legal battle with the U.S. Securities and Exchange Commission (SEC).

On May 27, 2025, Ripple issued a memorandum to the SEC’s Crypto Task Force. This memorandum responds to a speech by SEC Commissioner Hester Peirce. Ripple’s document emphasizes existing legal precedents, aiming to solidify XRP’s status as a non-security when exchanged on secondary markets.

Prominent Figures in Ripple’s Legal Strategy

Stuart Alderoty, serving as Ripple’s Chief Legal Officer since 2019, is central to the company’s legal and regulatory approach. His previous roles include legal leadership positions at CIT, HSBC, and American Express. Alderoty’s experience is instrumental in navigating the complex regulatory landscape surrounding digital assets.

Meanwhile, Commissioner Hester Peirce, known for her supportive stance toward innovation in crypto, continues to influence the dialogue with calls for clearer regulatory frameworks. Peirce’s “New Paradigm” speech has become a significant reference point for ongoing discussions between Ripple and the SEC.

Ripple’s Argument Against the Security Classification

Ripple’s legal memorandum draws on previous rulings, most notably from Judge Analisa Torres, who in July 2023 determined that XRP, when sold in secondary markets, is not a security. This ruling is often cited by Ripple to support its argument that the nature of the token itself should not determine its classification as a security.

In a statement on social media, Alderoty reinforced this argument, quoting legal analysis by Lewis Cohen: “There is no current basis in the law relating to ‘investment contracts’ to classify most fungible crypto assets as ‘securities’ when transferred in secondary transactions.”

Implications for Digital Asset Regulation

While Ripple’s memorandum directly addresses the SEC’s framework, it also resonated widely within the broader cryptocurrency community. The ongoing debate is critical not just for XRP but also for other cryptocurrencies, including ETH and similar altcoins.

The legal precedents and outcomes of Ripple’s case could potentially shape future classifications of digital assets under U.S. securities laws. The SEC has yet to finalize its stance on XRP’s classification, maintaining an active case in the appeals court. Community discussions around these issues remain vibrant, particularly on platforms like Twitter, where industry participants frequently share viewpoints.

Continued Debate Among Industry Advocates

The legal status of XRP and other digital assets continues to be a point of contention. Bitcoin Maxis argue for stricter regulations on altcoins, whereas Ripple advocates for regulatory clarity that recognizes functional distinctions in token usage.

Community members, along with Ripple’s supporters, await further developments, particularly any shifts in policy that could emerge from subsequent appeals or additional SEC rulings. Alderoty and Ripple remain committed to advocating for an equitable regulatory environment for all digital assets.