Charles Hoskinson has raised a blunt question about a crypto bill moving through Washington: under the Digital Asset Market Clarity Act of 2025, would XRP have been treated as a security at launch? His reading of the bill says yes. He also argued that the same starting point would apply to Cardano and Ethereum.
The bill’s framework starts with securities status
Hoskinson was referring to H.R. 3633, the Digital Asset Market Clarity Act of 2025. The measure has already passed the U.S. House of Representatives and is now being considered by the Senate. Its goal is to create a clearer regulatory structure for digital assets by splitting authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
His concern is centered on how the bill is written. As he described it, digital assets issued or distributed by a founding team to fund network development would begin life as securities by default. Only later could a token move toward commodity treatment, and only if the underlying blockchain could show a sufficient degree of decentralization.
Hoskinson says XRP’s early structure would matter
He pointed to the launch of the XRP Ledger in 2012, arguing that development and token distribution at that stage were closely tied to the founding team that later became Ripple Labs. On that basis, he said XRP likely would not have met the bill’s definition of a “mature blockchain system” at launch.
Hoskinson framed the issue in broad terms rather than as a case limited to one token. In his view, “everything starts as a security,” including XRP, Cardano, and Ethereum. The objection is not simply about where a token is placed on day one. It is about whether the law would push a wide range of blockchain projects into securities treatment first and ask questions later.
The harder issue may be the path out
He also warned that the transition away from securities status could become a regulatory bottleneck. Under the proposed structure, issuers would need to show that their networks are decentralized and no longer dependent on the original developers. That means projects would begin under SEC oversight and then try to prove they should no longer remain there.
According to Hoskinson, that process leaves room for broad interpretation by regulators. The SEC could require additional disclosures or procedural steps that make the standard difficult to satisfy. His criticism is that a poorly drafted bill would not reduce uncertainty in practice if the path to commodity classification remains slow or discretionary.
Not everyone in crypto is taking the same view
There is no single industry position on the legislation. Some figures, including Ripple CEO Brad Garlinghouse, have argued that passing a law, even an imperfect one, is preferable to leaving the market under open-ended regulatory uncertainty. Hoskinson disagreed with that trade-off. His position is that weak legislative design could lock in regulatory power over crypto projects for years.
That is why his question to the XRP community carries a wider implication. The debate is not only about XRP, but about how many digital assets could be treated as securities at the moment they are launched if the bill advances in its current form.