Hoskenson: "Clarity Act, XRP victory is not certain... Concerns over new coin being a 'security trap'"

Cardano founder Charles Hoskinson told the XRP community directly that, despite praising the “Clarity Act”(Clarity Act) as a “victory for the industry,” “You’re wrong.” He claimed that the bill does not eliminate regulatory uncertainty; instead, it means that if Ripple(Ripple) were established only now, XRP would be classified as a “security.”

In an interview, Hoskinson said the current wording of the “Clarity Act” “does not provide regulatory clarity that the industry needs.” He pointed out that, while the bill appears to offer guidance on the surface, it may actually lock in a structure that benefits existing large projects—making it difficult for the U.S. to produce “next-generation” cryptocurrency projects.

“A security trap” set by the “mature blockchain” standard

The key point he questions is the inclusion of the “mature blockchain(mature blockchain) standard” in the bill. To meet this standard, projects must have conditions such as community growth, liquidity, and broadly decentralized holdings. But ironically, to achieve these conditions, you must first have an exchange listing and capital inflows.

However, if a project is classified as a security from the start, listing and investment themselves will be hindered—removing the “escape route” to meet the criteria. Hoskinson said, “XRP won its lawsuit under a murky legal framework, but if this bill takes effect, and Ripple only begins operating today, then XRP will be a security.” He also claimed, “Ethereum(ETH) and Cardano(ADA) will also become securities, and the U.S. Securities and Exchange Commission(SEC), like Gary Gensler(Gary Gensler), will rely on this law.”

Granting “commodity” status to existing power players… while new projects face barriers

Hoskinson believes the “Clarity Act” will ultimately likely serve to “protect incumbents.” The logic is that Cardano, XRP, and Ethereum—already having scale, decentralization, and network maturity—can meet the “mature blockchain” standard and thereby receive “commodity(commodity)” status, while newly started projects will struggle to clear the same threshold.

He said, “This is a law for existing companies(incumbents). Cardano can pass, XRP can pass, and Ethereum can also pass. It’s good for me personally, but a disaster for the entire industry.” He explained that the “ambiguity” the industry previously complained about actually gave early projects time to grow before becoming targets of regulatory crackdowns, but this bill may remove that space and tilt the default status toward “securities.”

A warning about political risk… “Future Democrats might ‘weaponize’ it”

The long-term risk Hoskinson pointed to lies in changes to the political landscape. Laws are not set in stone, and future governments with different priorities may use the same framework more aggressively. He warned, “If the Democrats ‘weaponize’ it, they can build a structure where all new projects can become securities at any time.”

He then followed up with a question: “If you don’t think being classified as a security is a problem, then why is Brian Armstrong(Brian Armstrong) working so hard to prevent his stablecoin from being considered a security?” The view that the “Clarity Act” could shrink the market innovation entry point in the name of “regulatory clarity” is expected to become a litmus test for whether regulatory disputes not originating in the U.S. will only move in the direction favorable to existing major coins such as Ethereum(ETH), XRP, and Cardano(ADA).

Article summary by TokenPost.ai

🔎 Market Insights - Cardano founder Charles Hoskinson counters the view that the “Clarity Act”(Clarity Act) is a “victory for XRP,” noting instead that it may form a regulatory structure unfavorable to new projects. - He believes that the “mature blockchain(mature blockchain)” standard is effectively only beneficial to already large, established networks; rather than strengthening market competition, it carries the risk of protecting existing incumbents(incumbents). - He emphasizes a long-term risk: when the political landscape changes, the same legal framework could be enforced more aggressively, structurally tying new projects down as “securities.” 💡 Strategic Points - When investing in altcoins/new tokens, it is necessary first to check whether there is a viable “escape route” institutionally (i.e., the possibility of transitioning from “being a security early” to “being a commodity later” by meeting requirements such as listings, liquidity, and decentralization). - An effective strategy is to separate in your portfolio assets that benefit from favorable regulation (major coins that are already decentralized, liquid, and highly well-known) from assets that are more sensitive to regulation (projects that rely on early issuance, concentrated holdings, and a high dependence on listings). - Since the real impact of the bill and policies depends not only on the “text,” but also on the “enforcement party (the SEC’s tendencies) and regime changes,” it is necessary to manage risks on a per-event basis regarding U.S. regulatory issues (hearings, guidance, enforcement increases). 📘 Terminology Explanation - “Clarity Act”(Clarity Act): a piece of legislation attempted (or discussed) within the U.S. to improve regulatory clarity, aiming to distinguish whether cryptocurrencies are securities or commodities. The design of its applicability standards will greatly affect the market. - “mature blockchain(mature blockchain)”: a standard recognized as a “sufficiently mature network” based on quantitative and qualitative requirements such as community growth, liquidity, and decentralized holdings (after meeting the requirements, the likelihood of receiving commodity treatment increases). - “security(security)” vs. “commodity(commodity)”: securities face heavier regulatory burdens in issuance, sales, disclosure, etc.; commodities have a different regulatory structure in trading and circulation. The classification outcome directly affects the difficulty of exchange listings and capital inflows. - “existing incumbents(incumbents)”: projects/companies that already have scale, liquidity, decentralization, and brand effects, and are relatively advantaged in institutional changes.

💡 Frequently Asked Questions(FAQ)

Q. The “Clarity Act” is intended to provide “regulatory clarity.” Why is it said to be unfavorable to new projects? To meet the “mature blockchain” requirements in the bill, projects need conditions such as liquidity, decentralized holdings, and community scale. However, for new projects to meet these conditions, they typically need to achieve exchange listings and capital inflows first. The issue is that if a project is classified as a “security” from the beginning, listings and investment themselves become difficult, which may cause it to lose the opportunity to meet the criteria (an “escape route”). Q. Why are existing tokens like XRP, Ethereum, Cardano relatively more advantageous? Projects that already have scale, decentralization, and liquidity are more likely to meet the “mature blockchain” standard and be regarded as “commodity(commodity).” By contrast, newly started projects find it harder to cross the same threshold, and their default status may lean toward “securities.” Such an institutional change could favor existing incumbents. Q. What does the “political risk” Hoskinson mentioned mean for investors? This means that, compared with the law itself, the tendencies of enforcement parties (regulators) and political regimes are more likely to cause changes in interpretation and enforcement intensity. If future governments change and use the same framework in a more aggressive way, new projects could structurally be treated as “securities” permanently. For investors, it is necessary to manage the risk factors arising from U.S. policy changes (the text of the bill + the tone of enforcement) as a whole.

TP AI Notes This article summary is generated based on TokenPost.ai’s language model. It may differ from the original text’s main content or contain factual discrepancies.