Cardano Founder Charles Hoskinson Calls CLARITY Act "a Trap" Despite Ripple CEO Backing

Cardano founder Charles Hoskinson has stepped up his criticism of the Digital Asset Market CLARITY Act, describing the proposal as a trap for new crypto projects even as Ripple CEO Brad Garlinghouse continues to support the legislation. His latest remarks have added a new layer to the debate over how the United States should regulate digital assets, XRP, and blockchain-based fundraising.

Hoskinson said the current draft would treat newly launched tokens as securities at the start, placing them under Securities and Exchange Commission oversight. He argued that this structure gives the SEC too much power during the early life of a project and could leave teams stuck in a long approval process before they can move into a commodity-style framework.

His criticism centers on H.R. 3633, the Digital Asset Market CLARITY Act of 2025. The bill creates a framework that splits oversight between the SEC and the Commodity Futures Trading Commission, while also preserving a gatekeeping role for the SEC in cases tied to investment contracts and maturity tests for blockchain networks.

Why XRP Entered the Center of the Debate

Hoskinson used XRP as a key example in his argument against the bill. He said that if lawmakers had applied the current CLARITY Act framework at the time of XRP’s launch, the asset likely would have started under a securities label because of its early structure and concentration around its founders. That point has drawn attention because Ripple already sit at the center of long-running debates about token classification in the United States.

The XRP example has widened the split between Cardano and Ripple on market structure policy. Hoskinson argues that older projects may still find a path through the system, but newer projects could face tougher hurdles. In his view, that outcome could push crypto founders to build outside the United States rather than launch under rules that begin with SEC control.

That argument connects directly to the text of the CLARITY Act. The bill uses concepts such as “digital commodity,” “investment contract asset,” and a “mature blockchain system” to decide which regulator takes the lead. It also allows issuers to file notice with the SEC that a blockchain is mature or expected to become mature within four years, a process critics say could create uncertainty for startup teams.

At press time, XRP price traded at $1.35, up 1.43% in the last 7 days, while trading volume climbed 27.33%.

XRPUSD 7-Day Chart | Source: CoinCodex

Ripple and Brad Garlinghouse Take a Different Line

Ripple CEO Brad Garlinghouse has taken a more pragmatic position on the CLARITY Act. Recent reporting shows that he sees a high chance of the bill passing by April and has argued that the crypto sector should accept a workable framework rather than wait for a perfect one.

The divide matters because Ripple has become one of the most visible corporate voices in Washington’s crypto policy talks. Garlinghouse has framed the bill as a route toward rules that can reduce years of uncertainty around XRP, crypto trading, and token issuance. 

Hoskinson, by contrast, says a flawed law could lock harmful standards into place and give regulators broader room to pressure future networks.

The CLARITY Act already passed the House in July 2025 by a 294-134 vote, which means the proposal has moved beyond committee debate and into a more serious stage of the policy process. That alone has kept XRP, Cardano, and other large crypto names tied to the bill’s progress.