A growing rift is emerging among crypto industry leaders over the proposed market structure legislation known as the CLARITY Act, with major firms split on whether the bill should move forward in its current form.
While companies like Coinbase have pulled their backing, arguing the legislation falls short, other prominent voices in the industry say that imperfect regulation is still preferable to continued uncertainty.
a16z, Coin Center Back Moving the Bill Forward
“Crypto builders need clear rules of the road,” said Chris Dixon, managing partner at a16z Crypto, on Thursday. Dixon emphasized that over the past five years, bipartisan lawmakers and the Trump administration have worked closely with the crypto industry to safeguard decentralization, support developers, and ensure entrepreneurs have a fair chance to innovate.
“At its core, this bill does that,” Dixon said, referring to the CLARITY Act.
He acknowledged the legislation is flawed but stressed the urgency of progress. “It’s not perfect, and changes are needed before it becomes law. But now is the time to move the CLARITY Act forward if we want the US to remain the best place in the world to build the future of crypto.”
Peter Van Valkenburgh, executive director of Coin Center, echoed a similar sentiment, saying on Thursday that the organization is “optimistic about where the current market structure draft stands.”
The CLARITY Act was scheduled for a Senate markup this week but was postponed late Wednesday after the Senate Banking Committee delayed proceedings, adding further uncertainty to the bill’s path forward.
Coinbase Pulls Support, Citing “Too Many Issues”
The debate intensified following a high-profile withdrawal of support from Coinbase, the largest crypto exchange in the US.
Coinbase CEO Brian Armstrong said on Wednesday that he had reviewed the Senate Banking Committee’s draft text and concluded that he “unfortunately can’t support the bill as written,” citing “too many issues” with the current version.
The divergence in views highlights the broader challenge facing US lawmakers: crafting crypto regulation that balances innovation, consumer protection, and decentralization—while still satisfying a rapidly evolving industry.
“There are too many issues, including a defacto ban on tokenized equities, DeFi prohibitions, giving the government unlimited access to your financial records, and removing your right to privacy, erosion of the CFTC’s authority, stifling innovation, and making it subservient to the SEC, [and] draft amendments that would kill rewards on stablecoins, allowing banks to ban their competition.”
Armstrong acknowledged the extensive bipartisan effort behind the legislation, thanking members of the Senate for their work, but warned that the current version of the bill misses the mark.
“This version would be materially worse than the current status quo,” he said, adding, “We’d rather have no bill than a bad bill.”
That view was echoed by Ryan Rasmussen, head of research at Bitwise Invest, who argued that the draft CLARITY Act in its current form would be harmful across the crypto ecosystem. According to Rasmussen, the proposal is negative for tokenization, stablecoins, DeFi, privacy, builders, users, investors, and innovation more broadly.
Crypto lawyer Jake Chervinsky highlighted many of the same concerns raised by Armstrong but struck a more optimistic tone on the bill’s future. He noted that the upcoming markup — and potential changes on the Senate floor — present an opportunity to improve the legislation.
“We have an opportunity at markup, and hopefully afterward on the Senate floor, to make CLARITY the best it can be,” Chervinsky said. “For better or worse, the text will change a lot before it becomes law. Let’s go for better.”
Venture capitalist Tim Draper also voiced support for the Coinbase chief executive’s position, aligning himself with calls for significant revisions before the bill advances.
“Brian Armstrong makes sense here. The current Senate compromise is worse than no bill at all. Sounds like the banks have been meddling.”
Despite the political and industry debate surrounding the CLARITY Act, Bitcoin appears largely unfazed.
Speaking to Cointelegraph, Gracie Lin, CEO of OKX Singapore, said Bitcoin’s latest rally “reminds us that markets often start pricing outcomes before policymakers conclude their debates.”
“We’re seeing Bitcoin respond to renewed ETF demand, improving liquidity, and growing optimism that the Digital Asset Market Clarity Act could deliver a more stable framework for US digital asset markets,” Lin said.
Looking ahead, she pointed to three key factors investors are watching closely: the progression of the CLARITY Act through the Senate Banking Committee, the durability of spot Bitcoin ETF inflows, and whether the Federal Reserve’s late-January meeting maintains supportive financial conditions or sparks a sharp market reset.
Bitcoin climbed above $97,600 in late trading on Wednesday before easing slightly to around $96,350 at the time of writing.
