Cardano’s Charles Hoskinson Has One Question For XRP Community and It Might Be Worth Listening To

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Cardano founder Charles Hoskinson has raised concerns about a proposed U.S. cryptocurrency bill, warning it could place several digital assets, including XRP,  under securities laws at launch.

Speaking about the Digital Asset Market Clarity Act of 2025, Hoskinson said the legislation could classify many blockchain tokens as securities by default, forcing projects to prove to regulators that they should later be treated as commodities.

The bill, formally known as H.R. 3633, has already passed the U.S. House of Representatives and is now under consideration in the Senate. It aims to create a clearer regulatory framework for cryptocurrencies by dividing oversight between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.

However, Hoskinson warned the structure of the bill could create new regulatory risks for the crypto industry.

XRP Would Likely Start as a Security

“Here’s a very simple question for the XRP community. This is a fact-based conversation based on the bill as written today. Reading the bill as it currently stands, would XRP have been considered a security at the time of its launch?” he asked.

According to Hoskinson, the legislation assumes that newly launched digital assets begin as securities if they are issued or distributed by a founding team to fund network development.

“Everything starts as a security,” he said while reviewing the bill. “XRP starts as a security. Cardano starts as a security. Ethereum starts as a security.”

Under the framework proposed in the Clarity Act, a token could later transition to commodity status only if the underlying blockchain becomes sufficiently decentralized. At that point, oversight would move from the SEC to the CFTC.

Hoskinson argued that when the XRP Ledger launched in 2012, its development and token distribution were heavily linked to its founding team, which later formed Ripple Labs. Because of that early structure, he believes the network would not have met the bill’s definition of a “mature blockchain system” at the time.

Concerns Over Regulatory Power

Hoskinson also warned that the legislation could allow regulators to delay or deny a project’s transition away from securities classification.

Under the proposal, crypto issuers would need to prove that their networks are decentralized and no longer reliant on the original developers. Hoskinson argued that this process could be heavily influenced by regulatory interpretation.

“You start as a security, and then you have to go to the SEC and say, ‘I don’t think I’m a security anymore,’” he said.

He said that the agency could impose additional disclosure requirements or procedural hurdles that might make it difficult for projects to meet the standard.

Some industry leaders, including Brad Garlinghouse, have argued that passing legislation — even if imperfect, is better than continuing under regulatory uncertainty. Hoskinson, however, said poorly designed rules could entrench regulatory power over crypto projects for years.

“This is what a bad bill means,” he said, warning that future rulemaking could make it difficult for new blockchain projects to escape securities classification.