Cardano’s Charles Hoskinson has a message for the $XRP community celebrating the Clarity Act as a victory for the industry: you are wrong, and the bill you are cheering for would have classified your token as a security if Ripple were founded today.
Speaking in an interview, Hoskinson said the Clarity Act in its current form, he argued, is not the regulatory clarity the industry needs. It is a piece of legislation that protects established incumbents while quietly making it impossible for the next generation of crypto projects to exist in America.
The Security Trap
Under the mature blockchain standard written into the current version of the Clarity Act, a new project has no viable path to escaping security classification. To pass the test, a project needs community growth, liquidity, and broad ownership distribution. But to achieve those things, it needs exchange listings and investment. And it cannot get either if it is classified as a security from day one.
“$XRP won its court case under the ambiguous laws,” Hoskinson said. “Under this law, if Ripple was founded today, $XRP would be a security. Ethereum would be a security. ADA would be a security. And a Gary Gensler-style SEC would have the law on their side.”
The very tokens whose communities are most loudly supporting the Clarity Act would not exist under the framework they are endorsing. The old ambiguity that everyone complained about was, in practice, what allowed those projects to grow before regulators could pin them down. This bill removes that ambiguity and replaces it with a default classification that benefits no one launching something new.
A Bill for the Incumbents
Hoskinson was explicit about who the Clarity Act actually serves. Cardano, $XRP, and Ethereum would likely receive commodity status under the mature blockchain standard because they already satisfy the requirements. They are large enough, decentralised enough, and established enough to pass the test as it stands today. That is good for them. It is not good for the industry.
“It’s a bill for the incumbents,” he said plainly. “Cardano will get a pass. $XRP will get a pass. Ethereum will get a pass. We’re already commodities under the mature blockchain standard. So it’s good for me. It’s horrible for the industry.”
The Democrats Will Weaponise It
The longer-term risk Hoskinson identified is political. The bill will not be permanent as written. At some point, a future administration with different priorities will have the ability to apply the same framework with maximum hostility toward new projects.
“When the Democrats weaponise it, they can structure it in a way that every new project will always be a security,” he warned. “And if being a security is not a problem, then why is Brian Armstrong fighting so hard for his stablecoin not to be?”
