$XRP security status has returned to the center of the U.S. crypto policy debate as supporters point to Section 105 of the latest CLARITY Act draft and say it could strengthen the legal position of $XRP secondary market sales.
The debate grew after $XRP-focused accounts cited pages 110 to 112 of the draft, arguing that Section 105 includes language tied to prior court rulings. Their view is that if a court has already ruled that a digital asset transaction was not a security before the bill becomes law, that transaction should not later be reclassified as a security under the same framework.
$XRP supporters immediately connected that language to the 2023 ruling by Judge Analisa Torres, which found that $XRP secondary market sales were not securities transactions. They argue that Section 105 could create a federal legal shield around that part of the Ripple case if the bill passes in its current form.
The claim remains tied to draft legislation, not enacted law. The CLARITY Act still has to pass through committee, survive amendments, move through the Senate, and possibly be reconciled with other legislation before becoming law.
Section 105 Brings $XRP Security Status Back Into Focus
Section 105 is drawing attention because it introduces a decentralization test and language around “network tokens.” $XRP supporters say this category could fit $XRP because the $XRP Ledger operates independently of Ripple and is used for payments, settlement, and utility-based transactions.
The argument from $XRP advocates is that $XRP’s value is linked to network usage rather than direct claims on Ripple’s profits. They also say the $XRP Ledger continues to run even if Ripple is not directly involved, which they believe supports the case for $XRP being treated differently from a company-issued security.
Critics may still challenge that reading. The draft language would need legal interpretation, and regulators could still examine specific transactions, issuer conduct, or market activity depending on how the final bill is written.
For $XRP holders, the main point is whether the CLARITY Act can reduce the risk of future SEC action over secondary market trading. Supporters say Section 105 may help prevent a future administration or SEC chair from reopening the same security classification fight.
Ripple Executives Back CLARITY Act Progress
Ripple CEO Brad Garlinghouse has praised the Senate Banking Committee for advancing the CLARITY Act and said millions of Americans already participate in crypto markets. He said Ripple supports the bill because crypto users deserve rules and protections similar to other asset classes.
Ripple Chief Legal Officer Stuart Alderoty also cited data from the National Crypto Association’s 2026 State of Crypto Holders Report, which said 67 million Americans hold cryptocurrency. According to the report, California leads with 9.5 million holders, followed by Texas with 5.94 million and Florida with 4.71 million.
Ripple’s support for the bill comes as the company and $XRP remain tied to broader U.S. digital asset regulation. Clearer rules around token classification, exchange oversight, and market structure could affect $XRP, Solana, Litecoin, Hedera, Dogecoin, Chainlink, and other major tokens.
The Senate Banking Committee markup is expected to be closely watched by crypto firms, banks, investors, and policy groups.
Senator Warren Amendments Add New Uncertainty
Senator Elizabeth Warren has submitted more than 40 amendments to the CLARITY Act, according to reports cited by crypto market observers. One reported amendment would strike language described by supporters as a grandfather clause, which could affect tokens with prior court rulings or established trading status.
Warren has argued that the bill puts investors, national security, and the financial system at risk. She has also criticized the lack of conflict-of-interest provisions tied to President Donald Trump and his family’s crypto ventures.
Source: X
Another Warren amendment would block the Federal Reserve from granting master accounts to crypto firms. Companies linked to the debate include Ripple, Anchorage Digital, Circle, and Custodia Bank, while Kraken has reportedly received a Fed master account.
Other Democratic proposals from Senators Jack Reed and Tina Smith reportedly address stablecoin yield restrictions and the use of crypto assets such as Bitcoin and $XRP for tax payments.
Consequently, tomorrow’s markup may therefore become a test of how much support remains for the CLARITY Act in its current form.
