Ripple’s Chief Legal Officer Stuart Alderoty is making the case that killing the Digital Asset Market Clarity Act would be worse than passing an imperfect version of it. His argument is straightforward: without a comprehensive regulatory framework, the crypto market remains a playground for the kind of bad actors that brought us the FTX collapse.

The warning comes as the CLARITY Act, formally known as H.R. 3633, heads toward a Senate floor vote. And for a company that spent years locked in litigation with the SEC over XRP, Ripple has more than a passing interest in how this plays out.

What the CLARITY Act actually does

The bill attempts to solve one of crypto’s oldest headaches: figuring out which regulator is in charge of what. Right now, the SEC and CFTC both claim jurisdiction over different aspects of digital assets, creating a regulatory no-man’s-land that confuses everyone, including the agencies themselves.

The CLARITY Act draws a line between digital assets that should be treated as securities and those that should be treated as commodities. It also creates a pathway for assets to transition from one classification to the other.

The House already passed the bill with a 294-134 vote back in July 2025. The Senate Banking Committee followed up by advancing the bill with a 15-9 vote in May 2026.

Getting 60 votes in the Senate remains the challenge. Ongoing negotiations around stablecoins, ethics provisions, and exemptions for certain digital assets have kept the bill from being a slam dunk. Trump has reportedly entered the conversation, with a meeting scheduled with senators to discuss the legislation’s path forward.

Ripple’s stake in the outcome

Alderoty’s push for the CLARITY Act isn’t exactly a surprise. Ripple spent years battling the SEC in one of the most closely watched enforcement actions in crypto history. The case centered on whether XRP sales constituted unregistered securities offerings.

Alderoty has been one of the loudest voices in the industry calling for what Ripple brands as “crypto clarity,” the idea that clear rules are better than no rules, even if those rules come with trade-offs.

His latest argument leans heavily on consumer protection. With an estimated 67 million US digital asset holders, Alderoty contends that the current regulatory vacuum puts real people at risk. He pointed to the collapse of FTX as a case study in what happens when oversight doesn’t keep pace with innovation.

The Senate math problem

Getting to 60 votes in the Senate requires threading a needle that gets smaller with every amendment. Several sticking points remain unresolved.

The division of oversight between the SEC and CFTC is one of the thorniest issues. Stablecoin regulation is another flashpoint, with some senators wanting stablecoin provisions baked into this bill while others prefer to handle stablecoins through separate legislation. Ethics provisions have also generated friction, particularly questions about whether elected officials and their families should be allowed to hold digital assets while shaping policy around them.

What this means for investors

If the CLARITY Act passes, the most immediate impact would be on institutional participation. Large asset managers and banks have consistently cited regulatory uncertainty as their primary reason for approaching crypto cautiously. A clear framework that defines which assets are securities and which are commodities would remove one of the biggest barriers to institutional capital entering the market.

For retail investors, the consumer protection provisions could be meaningful. The current environment, where enforcement actions are the primary regulatory tool, is essentially a system that punishes bad behavior after the damage is done.

There’s a competitive angle too. Other jurisdictions, notably the EU with its MiCA framework, have moved ahead on crypto regulation. Alderoty and other industry advocates have framed the CLARITY Act as essential for maintaining US competitiveness in digital finance.