XRP Would Have Been Security Under New Crypto Bill, Cardano Founder Says - U.Today
Cardano founder Charles Hoskinson took aim at Ripple CEO Brad Garlinghouse over his support for the Clarity Act
Hoskinson has argued that the industry is walking into a trap set by regulators.
Meanwhile, Garlinghouse has repeatedly stressed that clarity is better than chaos, urging the industry to be pragmatic.
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A dangerous bill
Hoskinson used XRP, the Ripple-linked cryptocurrency, to demonstrate how the bill is dangerous. He argued that legacy tokens would have been severely restricted at their inception under the current text
“Reading the bill as written, would XRP be a security at the time of launch? Based on the text and regulatory framework established by H.R. 3633, XRP would likely have been classified as an investment contract asset, a security, at the time of its initial launch rather than a digital commodity,” Hoskinson explained.
“When XRP was launched in 2012, its ledger and distribution of tokens were highly centralized around its founders, who subsequently formed OpenCoin, later named Ripple Labs,” he said. “Because the network was brand new, heavily reliant on the founders’ efforts to develop the ecosystem, and completely controlled by a concentrated group at the specific moment of time, the XRP ledger would not have met the Clarity Act’s definition of a mature, decentralized blockchain system.”
This could set a dangerous precedent for all new innovations in the space, Hoskinson warns. “This bill as written, everything starts as a security. XRP starts as a security,” he noted, adding that while older projects like XRP might eventually be grandfathered in, “it creates attack vectors through bureaucratic nonsense for the SEC to destroy all future American cryptocurrency projects.”
As reported by U.Today, Garlinghouse previously stated that there was an 80% chance of the bill passing in April
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