XRP wins commodity status as SEC, CFTC end 7-year legal fight

XRP's seven-year legal limbo ended in March when two U.S. agencies formally classified it as a commodity — but the ruling rests on administrative guidance that a future administration could reverse overnight.

The Securities and Exchange Commission and Commodity Futures Trading Commission jointly issued an interpretive release in March 2026 classifying 16 major tokens — including XRP, Bitcoin, Ether, and Solana — under a five-category taxonomy. XRP was designated a digital commodity, placing it under CFTC jurisdiction rather than SEC oversight, according to the joint guidance documented by Lowenstein Sandler.

"The classification resolves a decade of jurisdictional conflict between two federal agencies that both claimed authority over crypto markets but neither had a statutory mandate to govern them comprehensively," said Diana Chen, a regulatory analyst who tracks SEC filings related to digital assets. "But it is an administrative action, not a law. Any future administration can rescind it without a congressional vote."

XRP traded at $1.10 as of Thursday, roughly 70% below the $3.65 peak it reached in July 2025 and far from its all-time high of $3.84 set in January 2018. The token's market capitalization stands at about $68.7 billion based on 62.47 billion tokens in circulation, according to CoinGecko data.

Why administrative guidance is not enough

The March 2026 interpretive release gives crypto exchanges, funds, and DeFi platforms a working legal framework — but one that can be pulled out from under them. The SEC retains broad discretion to argue that specific digital assets are securities, and institutional adoption has proceeded without a clear statutory foundation.

The CLARITY Act, the most comprehensive crypto regulatory framework ever to pass one chamber of Congress, would write those same classifications into federal statute. The House approved it on a 294-134 bipartisan margin in July 2025, and the Senate Banking Committee advanced a version on a 15-9 vote in May 2026. But the bill remains stalled in the Senate over an ethics provision that would bar senior government officials — including the president — from maintaining personal crypto business interests while in office.

If the CLARITY Act fails to pass before the August recess, the March 2026 administrative guidance remains the operative framework. That leaves every exchange and institutional fund operating on the assumption that XRP is a commodity exposed to potential reclassification by a future SEC. The EU's Markets in Crypto-Assets regulation, which reached full enforcement across all 27 member states on July 1, provides a statutory framework that the U.S. has not matched.

What comes next for XRP holders

For the roughly 50 million Americans who own cryptocurrency, the distinction between administrative guidance and statute carries real consequences. The SEC and CFTC's joint classification gave XRP a legal foothold, but the CLARITY Act would make that foothold permanent. Without it, the regulatory status of every token classified in March — including XRP — depends on which party controls the SEC after the next election.

The Senate has until the August recess to advance the bill. Senate Majority Leader John Thune has pledged a floor vote before the break, with the week of July 20 as the most likely window. Prediction markets reflect the uncertainty: Polymarket traders place a 39% probability on the CLARITY Act being signed into law during 2026, down from 82% in February.

This article is for informational purposes only and does not constitute investment advice.