Ripple Urges SEC to Abandon Decentralization as a Legal Test

• Ripple contends that decentralization is a vague and ever-changing concept, making it a weak basis for deciding whether a crypto token is a security under the law.
• The company called for a clear, rights-based regulatory framework that focuses on legal rights and enforceable obligations rather than vague technical criteria.
• Ripple pointed out that decentralization depends on a range of factors like who contributes code, how nodes are spread out, who participates in governance, and the token’s economic model, all of which can change as a network evolves.

Ripple Labs submitted a formal letter to the SEC’s Crypto Task Force, urging regulators to move away from the subjective decentralization test often used to classify digital assets under securities law. The company contends that decentralization is a vague and ever-changing concept, making it a weak basis for deciding…

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