US must act now on crypto legislation, before 'switch flips back,' says Ripple Chief Legal Officer Alderoty

The U.S. needs to "seize" the moment and pass a bill to regulate the cryptocurrency industry before "the switch flips back" to a less friendly regulatory environment, said Ripple Chief Legal Officer Stuart Alderoty. 

The Trump administration over the past year has brought the crypto industry back after the industry was "dangerously at the precipice" of losing out on growing in the U.S., Alderoty said on stage last week at the Wyoming Blockchain Symposium. 

Many in the cryptocurrency industry previously described the Biden administration as being hostile, particularly when former Securities and Exchange Commission Chair Gary Gensler was at the helm. Gensler said that most cryptocurrencies are securities and brought several enforcement actions against crypto firms during his four years as chair. 

"This country is built on entrepreneurs, consumer protection, credible markets," Alderoty said. "If we seize on that opportunity now and get market structure right, I think we win."

Ripple was sued by the SEC under the first Trump administration, which continued on under former Chair Gensler. That case recently came to a close after New York Judge Torres ruled in 2023 that some of Ripple’s programmatic sales using algorithms did not violate securities laws because of a blind bid process in place for them. She did, however, rule that other direct sales of XRP tokens to institutional investors were securities.

Now, lawmakers in Washington D.C. are focused on passing a bill to regulate the crypto industry as a whole.  The full House passed a market structure bill last month, called the Digital Asset Market Clarity Act, which would carve out areas for the SEC and Commodity Futures Trading Commission to regulate, giving the CFTC broader authority.

Republican Sen. Cynthia Lummis said last week during the Wyoming Blockchain Symposium that she hoped to have a bill done by the end of the year, noting that some senators may take up the House's version as its "base bill."

Alderoty said that bill needs to be done ahead of a switch to a potentially more "hostile" environment. Crypto-focused political action committee Fairshake, along with other PACs have already amassed a $141 million war chest in preparation of midterm elections next year. Lawmakers have also begun to announce their runs for office, including crypto critic Sen. Sherrod Brown, who previously led the influential Senate Banking Committee. 

"If we don't get market structure right and then the switch flips back to a more hostile policy or regulatory environment, I think there is a very credible risk that we will lose out to the EU (European Union), APAC (Asia-Pacific) or maybe even to the Middle East," Alderoty added.