XRP price is still hovering around $1.00, barely moving despite a huge regulatory development. The token has been stuck in a tight range for weeks, with bulls and bears unable to break the stalemate.
On Tuesday, the U.S. Securities and Exchange Commission formally proposed “Regulation Crypto Assets,” a new framework that could reshape how crypto projects raise capital in the United States. The proposal comes as the Clarity Act remains stalled in the Senate.
The new rules would create two registration exemptions: a one-time exemption for offerings up to $5 million over four years, and a recurring exemption for offerings up to $75 million in any 12-month period. Issuers would still need to provide narrative disclosures, and those using the larger exemption would face financial statement and ongoing reporting requirements.
More importantly, the proposal includes a conditional safe harbor that would allow a crypto asset to exit securities classification once an issuer has completed or permanently ceased its “essential managerial efforts”. That provision directly addresses the core question that defined the SEC’s lawsuit against Ripple over XRP.
Pro-Ripple Lawyer: The Safe Harbor Path for XRP
Bill Morgan, a pro-Ripple lawyer, weighed in on the proposal’s implications for XRP. He noted that the safe harbor could provide a plausible path for XRP to escape investment contract treatment, but only if Ripple can certify that its managerial efforts in relation to XRP have permanently ceased.
It is interesting trying to understand these proposed rules in ''Regulation Crypto Assets", should they not fundamentally change after the 60-day comment period, in the context of the joint interpretation of the SEC and CFTC in March 2026 that classified XRP, BTC, ADA, SOL as… https://t.co/56Xx74waPz
— bill morgan (@Belisarius2020) August 19, 2026
“There is a safe harbour exit ramp (Rule 400) but for this to apply Ripple would need to certify its managerial efforts in relation to XRP have permanently ceased to avoid investment contract treatment,” Morgan said.
He pointed out that Ripple’s growing focus on RLUSD and its recent acquisitions may help in this respect. “I think XRP has a plausible path to attempt to satisfy the conditions of the proposed safe harbour. I think most of Ripple’s activities today are the type of post functionality (of the XRPL) activities the current SEC treats as non-essential.”
Morgan questioned how useful the new exemptions would be for Ripple. The $75 million annual fundraising exemption is dwarfed by the scale of Ripple’s monthly escrow releases. At current prices, Ripple is releasing roughly $300 million worth of XRP from escrow each month. The company is set to unlock 1 billion XRP on September 1, though it plans to re-lock 600 to 800 million of that, injecting only 200 to 400 million into the market.
“The fact that the proposal creates two new exemptions including a fundraising exemption of $75 million a year do not seem particularly useful to Ripple for sales to institutions,” Morgan said.
Read more XRP news: Ripple Expands in Korea and Whale Activity Explodes
A Formal Exit Path for XRP
The safe harbor provision is the most important element for XRP. It provides a formal mechanism for a crypto asset to exit securities status without needing a court ruling. The Ripple case ended in August 2025 with Judge Torres ruling that XRP itself is not a security, but institutional sales crossed the line. The case settled, but no rule told issuers how to exit securities status without a judge’s decision. This proposal provides that path.
Morgan noted that “Nothing in the document is negative for XRP itself which is treated as a commodity.”
The proposal now enters a 60-day public comment period. Industry groups and stakeholders will have time to submit feedback before any final rulemaking. The SEC’s move comes as the Clarity Act remains stalled in the Senate, with a procedural vote scheduled for September 15.
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