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The US crypto industry is showing visible cracks as executives and policy advocates clash over the Digital Asset Market Structure bill, better known as the CLARITY Act. While some industry leaders argue the legislation represents long-awaited regulatory clarity, others — most notably Coinbase — warn that the bill could do more harm than good in its current form.
The disagreement highlights a deeper divide within crypto over how regulation should shape the industry’s future, especially as lawmakers push forward with bipartisan frameworks to govern digital assets.
Industry Divided On CLARITY
Crypto executives remain sharply split on whether the CLARITY Act should advance as written or be fundamentally reworked. Supporters argue that any regulatory framework is preferable to the uncertainty that has plagued the sector for years, while critics believe the bill threatens innovation, privacy, and competition.
The debate intensified after the Senate Banking Committee delayed a scheduled markup of the bill, signaling ongoing negotiations and unresolved disagreements among lawmakers and stakeholders.
Supporters Call For Progress
Proponents of the CLARITY Act emphasize the need for clear rules to ensure the US remains competitive in the global crypto economy. a16z Crypto managing partner Chris Dixon said that crypto builders urgently need regulatory certainty to continue developing decentralized technologies in the United States.
Dixon noted that Republicans, Democrats, and the Trump administration have worked with the crypto industry for years to support decentralization, developers, and entrepreneurs. While acknowledging that the bill is not perfect, he argued that moving it forward is essential if the US wants to remain a leader in blockchain innovation.
“It’s not perfect, and changes are needed before it becomes law,” Dixon said. “But now is the time to move the CLARITY Act forward.”
Coin Center executive director Peter Van Valkenburgh echoed that optimism, stating that he remains encouraged by the current draft and believes the bill can still deliver meaningful regulatory clarity.
Coinbase Withdraws Its Support
The legislation became significantly more controversial following Coinbase’s high-profile withdrawal of support. Coinbase CEO Brian Armstrong said he reviewed the Senate Banking draft but could not endorse the bill as written.
Armstrong listed “too many issues” with the legislation, including what he described as a de facto ban on tokenized equities, restrictions on decentralized finance, expanded government access to financial records, erosion of privacy protections, and changes that would weaken the Commodity Futures Trading Commission while empowering the Securities and Exchange Commission.
He also criticized draft amendments that could eliminate stablecoin rewards and allow banks to block competition from crypto firms. While thanking lawmakers for their bipartisan efforts, Armstrong said the bill would be “materially worse than the current status quo.”
“We’d rather have no bill than a bad bill,” he said.
Critics Warn Of Harm
Other industry leaders quickly aligned with Coinbase’s position. Ryan Rasmussen, head of research at Bitwise Invest, said the current CLARITY Act draft would be harmful to tokenization, stablecoins, DeFi, builders, users, and investors alike.
Crypto lawyer Jake Chervinsky raised similar concerns but struck a more hopeful tone, emphasizing that the legislative process is far from over. He noted that the Senate markup and potential floor amendments present opportunities to improve the bill before it becomes law.
“For better or worse, the text will change a lot before it becomes law,” Chervinsky said. “Let’s go for better.”
Venture capitalist Tim Draper also backed Armstrong, arguing that the current compromise appears influenced by traditional banking interests and could stifle innovation rather than support it.
Markets Largely Unfazed
Despite the political uncertainty, Bitcoin has shown little reaction to the controversy. Speaking to Cointelegraph, OKX Singapore CEO Gracie Lin said Bitcoin’s recent rally reflects improving liquidity, renewed spot ETF demand, and optimism that the CLARITY Act could eventually provide a stable regulatory framework.
Lin added that markets often price outcomes ahead of policy decisions, suggesting that investors remain focused on broader macro and structural trends rather than short-term legislative friction.
She said attention is now centered on how the bill evolves in the Senate Banking Committee, whether spot Bitcoin ETF inflows remain resilient, and how the Federal Reserve’s upcoming meeting affects financial conditions.
Bitcoin briefly climbed above $97,600 in late trading before cooling to around $96,350 at the time of writing, showing continued strength despite regulatory uncertainty.
Regulation Debate Far From Over
The clash over the CLARITY Act underscores a fundamental question facing the crypto industry: is imperfect regulation better than none at all? While some see the bill as a necessary step toward legitimacy and institutional adoption, others fear it could lock in rules that undermine decentralization and innovation.
With Senate negotiations ongoing and amendments likely, the final shape of the CLARITY Act remains uncertain. What is clear, however, is that the crypto industry is no longer united on the path forward — and that division may shape US digital asset policy for years to come.