Charles Hoskinson Criticizes Clarity Act as Threat to New Crypto Projects

Cardano founder Charles Hoskinson has spoken out against the Clarity Act, a regulatory framework supported by Ripple's XRP community. In an interview, Hoskinson expressed concerns that the bill would have classified tokens like Ethereum, ADA, and XRP as securities if they were launched today.

Hoskinson argued that the Clarity Act benefits established projects rather than new ones. He stated that under the mature blockchain standard written into the current version of the act, a project needs community growth, liquidity, and broad ownership distribution to pass the test for not being a security. However, this creates a Catch-22 for new projects as they need exchange listings and investment to achieve these requirements but cannot get them if classified as a security from day one.

Hoskinson warned that the bill will not be permanent as written and may be used against new projects in the future. He predicted that a future administration with different priorities could apply the same framework with maximum hostility toward new projects, making it difficult for them to exist in America.