A clear divide is emerging inside the US crypto sector as debate intensifies over the proposed market structure bill known as the CLARITY Act. While several industry figures argue that federal rules are overdue, others say the current draft would cause more damage than help. The bill was scheduled for Senate markup this week but was delayed late Wednesday by the Senate Banking Committee.
Chris Dixon, managing partner at a16z Crypto, said on Thursday that crypto builders need clear rules to operate in the US. He said lawmakers from both parties, along with the Trump Administration, have spent years working with the industry to protect decentralization and support developers. Dixon said the CLARITY Act moves in that direction, even if changes are still required before it becomes law.
Dixon said advancing the bill now matters if the US wants to remain competitive in crypto development. Coin Center executive director Peter Van Valkenburgh said he remains optimistic about the current draft. Supporters argue that legal uncertainty has already pushed firms offshore and that a federal framework could reduce enforcement risk and unlock stalled projects.
Coinbase Leads Opposition to Current Draft
Opposition hardened after Coinbase publicly withdrew support. CEO Brian Armstrong said Wednesday that he reviewed the Senate Banking draft and could not back it as written. He said the bill contains too many issues, including limits on tokenized equities, restrictions on DeFi, and broad government access to user financial records.
Armstrong also warned the draft weakens privacy protections, reduces the authority of the CFTC, and strengthens the SEC’s control. He said proposed changes in the CLARITY Act could remove stablecoin rewards and allow banks to block competitors. While he thanked lawmakers for bipartisan efforts, Armstrong said the bill would be worse than the current system. He said Coinbase would prefer no bill over a bad one.
Investors and Legal Voices Raise Similar Concerns
Ryan Rasmussen, head of research at Bitwise Invest, backed Armstrong’s stance, saying the draft harms tokenization, stablecoins, DeFi, users, builders, and investors. Crypto lawyer Jake Chervinsky flagged the same risks but said the markup process still offers a chance to fix the bill. He said the text is likely to change before a final vote and urged lawmakers to improve it.
Venture capitalist Tim Draper also supported Armstrong, saying the Senate compromise appears influenced by banks and would slow crypto growth.
Market Performance
Bitcoin traded above $97,700 late Wednesday before easing to about $96,350 at the time of writing. Price action showed limited reaction to the policy debate so far.