Ripple Chief Legal Officer Stuart Alderoty has renewed calls for lawmakers to advance the Clarity Act, legislation designed to regulate the cryptocurrency and digital asset industries in the United States. The bill, formally known as H.R. 3633, cleared the House of Representatives in July 2025 with a 294-134 vote and now awaits action in the Senate Banking Committee following its executive session in May 2026.
Ripple CLO highlights need for stronger consumer protections
Alderoty described the Clarity Act as a vital step for consumer protection, specifically noting its anti-money laundering and know-your-customer requirements. He argued these provisions, alongside new enforcement tools for federal authorities and state attorneys general, would provide more robust safeguards for both consumers and legitimate businesses in the digital asset sector.
Stuart Alderoty, the top legal executive at Ripple—a blockchain payments company known for its XRP cryptocurrency—has played a prominent role in shaping internal legal policy amid ongoing regulatory scrutiny from U.S. agencies.
The Clarity Act is a consumer protection bill. It addresses the need for “strong AML/KYC requirements” and “real tools for law enforcement and state AGs,” Alderoty stated, pressing lawmakers not to let perfection delay meaningful reform: “Perfect can’t be the enemy of good. Let’s get this done.”
He warned that continued ambiguity around digital asset standards would leave consumers vulnerable to a lack of clear protections, with regulatory gaps that bad actors could once again exploit.
Industry observers scrutinize self-custody provisions
Despite the consumer focus, some in the crypto community see significant unanswered questions in the current draft of the Clarity Act. XRP enthusiast and XRPL validator Justin Nevins examined Senate revisions, suggesting the bill’s self-custody protections, while expanded from earlier versions, mainly apply to those holding digital assets for buying goods or services, not necessarily investors or savers.
Nevins pointed out that the “Keep Your Coins Act” section would prohibit federal agencies from restricting lawful self-custody of digital assets in self-hosted wallets, but the scope of “covered user” remains ambiguous. This uncertainty could affect those who prefer to hold cryptocurrencies as investments or for savings rather than for direct transactions.
The protections for self-custody would not override financial crime or sanctions laws, so authorities could still bar or restrict certain activities even if asset control stays with the user.
Mini dictionary: Senate Banking Committee, the U.S. Senate panel responsible for reviewing and making recommendations on banking, financial, and monetary policy, including legislation related to securities and digital assets.
Self-custody rights are recognized but must still comply with anti-money laundering and sanctions enforcement, so these provisions do not grant unrestricted crypto use.
Developer and DeFi protections under review
Another focus of the bill involves protections for blockchain developers. The Senate draft outlines safeguards for software developers, node operators, transaction validators, and others performing technical functions, ensuring these parties are not automatically classified as money transmitters under federal law.
However, these protections seem to depend on whether someone maintains operational control over a protocol. The question of who holds administrative privileges or upgrade keys is particularly relevant to decentralized finance (DeFi) projects, which often aim to limit centralized oversight.
Protocols that allow administrators to alter operations, censor access, or change functions midstream could lose some of these legal protections, highlighting the importance of true decentralization to qualify under the proposed law.
| Provision | Impacted Parties | Conditions |
|---|---|---|
| Self-custody protection | Digital asset users | Lawful purposes only; subject to AML/Sanctions laws |
| Developer exemption | Software developers, validators | No protocol control or administrative privileges |
There are also questions about the legal treatment of front-end interfaces, governance activity, and liquidity pool operations, which may require further regulatory guidance in future rulemaking.
SEC and CFTC roles clarified, but debate continues
A central aim of the Clarity Act is to set statutory definitions that delineate which digital assets fall under the Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC) oversight. By clarifying the regulatory divide, the bill seeks to reduce market uncertainty for exchanges, brokers, and innovators.
Supporters argue this approach is preferable to regulation by enforcement, while critics question whether all loopholes and potential conflicts have been resolved in the draft language.
Ripple and XRP community closely monitor developments
The debate carries particular weight for Ripple and the wider XRP network, given Ripple’s long-standing regulatory disputes in the United States. The company has highlighted the need for clearer laws rather than piecemeal enforcement, which can deter innovation and market participation.
A federal framework could affect how exchanges, financial firms, and developers interact with the XRP Ledger, though the ultimate impact depends on the final legislative text and subsequent implementation by regulators.
With the bill still under review and subject to amendments, it is uncertain what effect the final law might have on the regulatory status of $XRP or similar digital assets.
Next steps and unresolved issues
The Clarity Act’s specifics on self-custody and developer protections remain important for various sectors of the digital asset market. The bill’s definition of control, as well as exceptions tied to financial crime enforcement, could significantly influence its reach.
Whether these features ultimately address industry concerns or require further revisions will depend on congressional negotiations and future regulatory interpretation.
For now, the ongoing legislative process will determine if the Clarity Act brings a lasting solution to the call for regulatory certainty in the U.S. crypto sector.
