- Elizabeth Warren filed an amendment to remove the CLARITY Act’s grandfather clause.
- XRP, Solana, Litecoin, Hedera, DOGE, and Chainlink could lose automatic commodity status.
- XRP may face the biggest impact, as Ripple’s holdings could exceed proposed limits.
Senator Elizabeth Warren has filed more than 40 amendments to the CLARITY Act ahead of Thursday’s Senate Banking Committee markup.
One amendment targets a section of the bill that would automatically classify certain crypto assets as commodities if they already back a US-listed spot ETF or ETP by January 1, 2026.
The proposal now puts several large-cap tokens back into regulatory uncertainty. Tokens tied to the clause include XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink.
Under the current draft of the CLARITY Act, those assets could bypass the bill’s “mature blockchain” decentralization test if they qualify under the ETF carveout. Warren’s amendment would remove that shortcut.
XRP Faces the Biggest Hit
The largest impact could fall on XRP, according to Crypto Sensei. Without the grandfather clause, XRP would have to qualify under the same decentralization framework as other blockchain networks.
The process would likely examine validator distribution, governance structure, token ownership concentration, and Ripple’s control over supply.
Current discussions around the bill point to a threshold where affiliated entities cannot control more than 20% of the token supply for decentralization treatment.
Ripple reportedly controls roughly 32 billion to 33 billion XRP in escrow and another 5 billion XRP tied to on-demand liquidity operations. Ripple co-founder Chris Larson also reportedly holds around 2 billion XRP. This could become a problem if the ETF exemption disappears.
Market observers say Ripple may need to reduce holdings significantly to meet decentralization standards under the proposed framework. Estimates circulating in crypto markets suggest 18 billion to 20 billion XRP could eventually need redistribution if strict supply thresholds are enforced.
Senate Markup Turns Into Regulatory Fight
The Senate Banking Committee will begin markup on the CLARITY Act on Thursday at 10:30 a.m. EST. More than 100 amendments have already been filed.
The bill has become a battleground between crypto firms seeking clear federal rules and banking groups pushing for tighter restrictions on stablecoins, yield products, and crypto banking access.
Warren’s amendments also include a proposal blocking the Federal Reserve from granting master accounts to crypto firms. Companies tied to that debate include Ripple, Circle, Anchorage Digital, Custodia Bank, and Kraken.
At the same time, Senators Jack Reed and Tina Smith filed amendments targeting stablecoin yield products. Banking groups have reportedly sent more than 8,000 letters to Senate offices pushing lawmakers to tighten rules around crypto reward programs that resemble bank interest accounts.
Another amendment from Reed would prohibit crypto assets, including Bitcoin and XRP, from being used as legal tender or for tax payments.
Related: David Sacks Calls CLARITY Act a Key Step for U.S. Crypto Policy
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