Ripple submits new letter to SEC: detailing when tokens lose their security properties

Ripple has filed a supplemental letter with the Securities Exchange Commission (SEC) aimed at shedding light on a key issue: when should a token lose its security attributes. Ripple's Chief Legal Officer, Stuart Alderoty, highlighted the letter in a post on the X platform. According to him, Ripple sent the letter to the SEC's Crypto Task Force, led by Commissioner Hester Peirce.
The letter focuses on Peirce's recent talk, "The New Paradigm," in which she posed the question: "When will digital assets be decoupled from investment contracts?"
In response to this question, Ripple cited existing securities law analysis from prominent legal experts such as Lewis Cohen and others. In this analysis, Cohen argued that current U.S. investment contract laws do not classify most conventional transfers of fungible crypto assets in the secondary market as securities.
Ripple emphasized that Judge Analisa Torres reinforced this view in her landmark July 2023 ruling in Ripple's case against the SEC. Specifically, while the judge ruled that Ripple's sales of XRP to institutional clients constituted securities, she held that the company's sale of XRP in the secondary market did not constitute an investment contract.