Ripple CEO Blames Democrats' 'Politics' for CLARITY Act Failure

Ripple CEO Brad Garlinghouse criticized Senate Democrats after the CLARITY Act failed to advance Tuesday, but said crypto regulation in the U.S. could now shift toward rulemaking by the SEC and CFTC. The regulatory setback leaves Ripple and XRP (CRYPTO: XRP) largely unscathed. Why Garlinghouse Says ‘This One Stings‘ Garlinghouse on Wednesday noted that Ripple and the broader crypto industry had invested significant effort in pushing the legislation across the finish line. “This one stings,” Garlinghouse said, arguing that the consumers and U.S. competitiveness got left behind. He blamed the outcome on what he described as “the politics of the democrats,” adding that a “post-mortem” was needed to understand why negotiations failed. Democratic opposition centered largely on concerns that the bill’s ethics provisions did not go far enough to address potential conflicts involving President Donald Trump’s crypto interests. Several Republicans also voted against advancing the measure. How Will SEC, CFTC Take Center Stage Despite the setback, Garlinghouse said there is still "reason for optimism for crypto in the United States." He expects the SEC, led by Chair Paul Atkins, and CFTC, led by Chair Michael Selig, to continue developing rules to address the regulatory gaps left by Congress. The two agencies have already moved toward greater coordination, issuing joint guidance in March on how federal securities laws apply to crypto assets. Garlinghouse said Ripple plans to remain actively involved in that rulemaking process, while stressing that the failed Senate vote does not change the company’s business momentum. What Drives XRP To Stand On ‘Settled Ground’ Ripple Chief Legal Officer Stuart Alderoty emphasized that the CLARITY Act setback does not change XRP’s (CRYPTO: XRP) existing regulatory position. "Ripple and XRP stand on settled ground," Alderoty said pointing to SEC-CFTC interpretation issued in March, which explicitly lists XRP among crypto assets classified as digital commodities under the framework. Over the past 24 hours, XRP price tumbled below key support levels, however, institutional demand remained resilient. U.S. spot XRP ETFs recorded zero outflows on Sept. 15, compared with $450.3 million in net outflows from Bitcoin (CRYPTO: BTC) ETFs and $141.5 million from Ethereum (CRYPTO: ETH) ETFs. Read Also: XRP Could Crater If the CLARITY Act Vote Fails—Here's Why Image: Shutterstock