If the Clarity Act is Revived?…Lawyer: 'Strong Positive Impact on Ripple'

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Following the failure of the U.S. cryptocurrency market structure bill, the Clarity Act, to pass a Senate vote, XRP (Ripple) plummeted over 8% in a single day, causing approximately $7.1 billion in market capitalization to evaporate. Australian lawyer William Arthur Morgan analyzed that the key reason for this sharp decline was not due to XRP's legal status itself, but rather the need for regulatory clarity across the entire U.S. cryptocurrency market by institutional investors who are increasing their interest in XRP.

According to crypto media outlet Finbold on September 16 (local time), Morgan, a commercial litigation specialist lawyer at Morgan Mac Lawyers, explained that XRP reacted more sensitively to the failed vote because it stood to benefit more significantly than other major cryptocurrencies from the passage of the Clarity Act. XRP fell by 8.14% in the last 24 hours, trading at $1.29 at the time of writing, with its market capitalization decreasing by approximately $7.1 billion during the same period.

Morgan emphasized that it is not XRP itself that needs legal clarity, but rather institutional investors who are expanding their interest in the cryptocurrency market and XRP, who require regulatory clarity across the entire market. Accordingly, he assessed that if the Clarity Act passes in the future, it could have a strong positive impact on XRP's price. The bill failed to pass Senate procedures the previous day after failing to secure bipartisan support.

Stuart Alderoty, Chief Legal Officer (CLO) at Ripple Labs, reaffirmed the position that XRP's legal status is already clear. He explained that a U.S. federal court ruling in 2023 determined XRP is not a security, and in March of this year, the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly referred to XRP as a digital commodity through a shared interpretation. He added that SEC Chairman Paul Atkins and CFTC Chairman Mike Selig also understand the relevant market. However, Ripple Labs evaluated the delay in the Clarity Act's enactment as 'a tremendous missed opportunity' for American consumers, the digital asset industry, and U.S. competitiveness.

The price shock was more pronounced in XRP than across the overall market. XRP declined by 9.36% over the past 7 days, reducing its market capitalization to $80.4 billion. According to CoinMarketCap, its 24-hour trading volume increased by 45.1% to $6.64 billion. During the same period, Bitcoin (BTC) fell by 1.28%, Solana (SOL) by 3.51%, and Ethereum (ETH) by 2.98%, indicating that XRP's decline significantly outpaced that of major cryptocurrencies.

Based on this relative sharp decline, Morgan assessed that XRP's price shows a high correlation with regulatory clarity in the U.S. cryptocurrency market. Given that XRP recorded significantly higher volatility than other major cryptocurrencies on the day the Clarity Act's vote failed, the future of the bill's re-introduction and changes in the U.S. regulatory framework remain key concerns for the market.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*