Ex-SEC Lawyer Backs Ripple Speculation

As Washington wrestles with the future of U.S. crypto rules, a former SEC lawyer has sided with the Ripple clarity act position on how digital assets should be treated.

Former SEC attorney backs Ripple on speculation and securities law

Former Securities and Exchange Commission lawyer Teresa Goody Guillen has publicly endorsed Ripple‘s argument that speculation alone should not be enough to trigger securities regulation for digital assets.

Her written comments, filed with the SEC’s Crypto Task Force and published Monday on the commission’s website, respond to a January 9 letter from Ripple. In that letter, the company warned against any crypto regulatory framework that automatically treats a token as a security simply because buyers expect its price to rise.

Guillen told regulators that passive token trading activity must not be confused with enforceable investment rights under U.S. law. Moreover, she stressed that regulators should focus on legal obligations rather than market hype when drawing jurisdictional boundaries.

Passive economic interest and limits of the Howey test

Guillen agreed with Ripple’s core concern, warning that approaches built around a “passive economic interest” risk conflating ordinary market speculation with legally protected investment interests.

In her submission, she explained that her own academic work on digital asset market structure had been cited by Ripple only as part of a wider discussion of economic analysis. However, she clarified that those citations should not be read as supporting any attempt to equate mere price betting with formal investment contracts.

She emphasized that no single factor, including speculative intent, should be determinative when securities laws are applied to crypto assets. Instead, those economic and contractual elements must be weighed on a sliding scale grounded in legal obligations and historical regulatory practice.

That said, both Ripple and Guillen questioned enforcement strategies that lean too heavily on the “efforts of others” element of the Howey test. They argued that focusing only on buyers’ expectations of managerial efforts risks overlooking other key features of an investment contract, such as a common enterprise and enforceable profit rights.

Ripple’s CLARITY Act context and asset-versus-contract distinction

Ripple’s original submission to the SEC’s Crypto Task Force arrived as Congress was considering the CLARITY Act and broader howey test implications. At the heart of the company’s position is a sharp distinction between an asset and the transaction through which it may have been sold.

The company maintains that once an issuer’s enforceable promises have been fulfilled or expired, the token itself should not remain subject to securities regulation indefinitely. Moreover, Ripple warned that treating the asset as a permanent security would collapse the difference between a contract and a commodity-like asset, expanding regulatory authority beyond its intended limits.

In its letter, the company also pushed back against regulatory theories that define digital assets as securities primarily because of price expectations. According to Ripple, speculation not securities is the correct way to understand secondary-market trading unless the asset carries a clear legal claim on an issuer.

Guillen’s filing largely tracks that analysis while stopping short of endorsing any one bill. In one mid-document passage, she echoed the ripple clarity act framework by urging regulators to separate contract-based rights from the status of an underlying token in secondary markets.

Digital Value Instruments and new category proposals

Separately from her SEC submission, Guillen released a discussion draft for a proposed Digital Markets Restructure Act of 2026, which has not been adopted by either the SEC or the CFTC. The draft seeks to address gaps that have emerged as crypto markets evolved.

The proposal outlines a new classification called Digital Value Instruments for assets that do not fit squarely within the traditional securities or commodities buckets. Moreover, it sketches a risk-based division of oversight between agencies, with responsibilities allocated according to market function and investor exposure.

Her ideas arrived amid a broader clarity act policy debate in Washington. That said, Guillen framed the draft as a contribution to ongoing policy design rather than a fully formed legislative blueprint, emphasizing the need for flexible tools as tokenization spreads.

Broader policy input and concerns over trading platforms

The comments by Guillen were part of a wider wave of submissions filed in late January, as industry participants, policy organizations, and former officials weighed in on market integrity, tokenization, and cross-border supervision.

Several contributors warned regulators against broad exemptions for decentralized trading platforms, arguing that systemic risks and conflicts of interest could go unchecked. Moreover, they urged the SEC and CFTC to coordinate oversight to avoid regulatory gaps that sophisticated actors might exploit.

Other commenters focused on investor protection. They urged Congress and regulators to preserve core safeguards without forcing digital assets into disclosure regimes built for traditional equities. That said, many agreed that tailored transparency rules will still be needed for complex token structures.

Congressional delays and uncertain legislative timeline

The policy debate is unfolding as legislative momentum has slowed in the Senate. This week, a winter storm in Washington delayed the Senate Agriculture Committee’s first markup vote on digital asset market structure legislation.

The postponement pushed back an already uncertain schedule for comprehensive rules, further complicating prospects for near-term reform. Moreover, shifting political priorities have made bipartisan compromises harder to secure, despite pressure from market participants for clearer lines.

The Banking Committee’s parallel work on the CLARITY Act has also been delayed, leaving the Agriculture Committee’s bill as the most immediate vehicle for reform, despite visible partisan divisions. Observers say that, at least for now, clarity act ripple adoption will hinge on whether lawmakers can reconcile competing visions of federal oversight.

In summary, Guillen’s intervention reinforces a growing view that securities law for crypto must distinguish between contractual rights and asset-level trading. However, with Congress divided and timelines slipping, the final shape of that framework remains unresolved.