Garlinghouse expects the SEC and the CFTC to pick up more of the regulatory work while Congress remains stuck on legislation.
The US Senate failed to advance the Digital Asset Market CLARITY Act on Tuesday, falling short of the 60 votes needed to send the bill toward a final vote.
Ripple CEO Brad Garlinghouse says the setback stings, but it won’t change what his company is doing.
Garlinghouse Calls the Vote a Missed Opportunity
Writing on X shortly after the vote, Garlinghouse said his team and most of the industry gave everything they had trying to get the CLARITY Act across the finish line, calling the fight an opportunity that went beyond Ripple alone.
He argued that consumers and American competitiveness in digital finance were the ones who lost out, and said a review of what went wrong is coming. In his view, Democratic politics got prioritized over good policy.
Still, he did not frame the failed vote as the end of US crypto policy efforts. Garlinghouse expects the SEC and CFTC to continue rulemaking to fill the gap left by Congress. Ripple, he added, will remain involved in that process.
“Ripple’s business has never been stronger,” he wrote, pointing to demand across traditional finance and digital assets. A missed vote in Washington, he argued, does not change the company’s “momentum, our global footprint, or our customers.”
The firm’s Chief Legal Officer, Stuart Alderoty, followed with his own post. “Ripple and XRP stand on settled ground,” he said, pointing to the 2023 federal court ruling that found XRP is not a security, along with a joint interpretation the SEC and CFTC issued in March naming XRP a digital commodity. He also said he expects both agencies to keep setting clearer rules going forward.
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Reaction across the industry was split. CryptoLaw called it a shift, not an end, agreeing with the view that the fight for crypto rules will now move to the SEC and CFTC. However, analyst ChartNerd was more cautious, noting that agency rulemaking beats uncertainty but isn’t a substitute for actual legislation, since rules can be reversed.
What the CLARITY Act Would Have Done
Tuesday’s vote wasn’t meant to pass the CLARITY Act outright. It was a procedural step meant to move the bill closer to a final vote, and its failure means debate on the legislation will continue rather than end.
The bill sets out to divide oversight of digital assets between the CFTC and SEC and introduces the idea of “ancillary assets,” network tokens whose value may depend on the efforts of a company while still being treated as commodities and carrying their own disclosure rules.
It also targets decentralized finance platforms that look decentralized on paper but are still run by identifiable people, requiring CFTC registration for their spot trading activity.
Exchanges, brokers, and dealers, the companies most Americans actually use to buy and sell crypto, would face a new federal registration and oversight regime too.