XRP fell more than 8% after the US Senate blocked the Digital Asset Market Clarity Act, a key legislative priority for the crypto industry. The token dropped to as low as $1.27 before recovering to approximately $1.29, extending losses from $1.42 on September 14. The decline coincided with broader weakness across major cryptocurrencies and leveraged long liquidations.
The Senate vote on the Clarity Act failed 49-50 to invoke cloture, preventing the bill from advancing to debate. This eliminated a near-term legislative pathway for establishing a federal market-structure framework for digital assets.
Ripple Emphasizes Regulatory Gains
Ripple Chief Executive Brad Garlinghouse acknowledged the result "stings" but stated it does not alter the company's commercial trajectory or existing regulatory position. Chief Legal Officer Stuart Alderoty argued that XRP's regulatory standing remains intact despite the Senate setback.
Ripple pointed to regulatory actions from March when the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) jointly clarified how federal law applies to digital assets. Both agencies identified XRP as a digital commodity based on its characteristics, terms, and functions. This treatment preserves regulatory clarity that XRP lacked during Ripple's years-long legal dispute with the SEC.
Regulatory Framework Limitations
Ripple acknowledged that the March interpretation offers less durable protection than legislation would provide. The regulatory framework interprets existing laws and leaves the SEC room to refine or revise its approach. Transaction-specific analysis under the Howey test remains in effect, meaning a digital commodity classified as such can still be offered or sold as part of an investment contract subject to securities laws.
With Congress stalled, Ripple expects SEC Chairman Paul Atkins and CFTC Chairman Mike Selig to play larger roles in developing crypto rules. The company stated it will remain engaged with both agencies as that process moves forward.
Institutional Demand Remains Strong
Despite the price decline, institutional interest in XRP-linked products persists. US spot XRP exchange-traded funds attracted approximately $1.71 billion in cumulative net inflows through September 14, with roughly $1.58 billion in net assets. This placed XRP behind only Bitcoin and Ethereum among major single-asset spot crypto ETF categories and ahead of Solana's approximately $1.37 billion in cumulative inflows.
Ripple said demand remains strong across payments, stablecoins, and institutional markets and plans to continue expanding its global business while advocating for clearer US rules.
