Among the key players in the industry, the support of the U.S. crypto market structure bill, also known as the CLARITY Act is faltering. The pullback is due to issues related to trust, scope, and long-term regulatory risk.
Why Coinbase Withdrew Support for The Crypto Market Structure Bill
Coinbase will support the CLARITY Act as it is. The company feels that the bill presents structural issues as opposed to clarity.
Coinbase CEO Brian Armstrong said that he had read the Senate draft text with close attention to details. He finished the proposal by concluding that it causes more damage than regulatory certainty.
According to Armstrong, the bill increases the influence of the government in crypto markets. He cautioned that this solution would risk the privacy of users and kill innovation.
He further added that draft undermines transparent regulation boundaries. Nevertheless, he also wrote that the negotiations regarding the CLARITY Act will still go on despite Coinbase backing out.
In his perception, overlapping of authority would slow down development. Coinbase believes that hastily passed legislation is likely to entrench bad rules and once that legislation is approved it is hard to undo.
Industry Leaders Warn About CLARITY Act
A number of industry analysts are worried about the same issues as Armstrong. They said that bad regulation is more dangerous than regulatory uncertainty. This risk has only become increasingly broad because the crypto bill is threatened by White House.
Ryan Rasmussen, the head of the Bitwise research, decried the overall effect of the bill. He claimed the draft is prejudicial to builders and investors in the ecosystem.
Structural concerns were also brought up by crypto lawyer Jake Chervinsky. He pointed out that the crypto bill can be revised further. Chervinsky reported that the industry’s response to the Senate markup is still one that required critical review. Hence, he asked that legislators should polish the document before it was accepted.
The position of Coinbase was further backed up by venture capitalist Tim Draper. According to him, compromise language invites political bias by compromising existing financial interests.
Can Crypto Firms Agree on Market Structure?
Not everybody in the cryptocurrency industry is in agreement though. Others complain that it is better to make progress than remain stagnated. Chris Dixon of a16z Crypto, justified the intent of the bill by arguing that developers require straightforward legal systems in order to work.
Coin Center executive director Peter Van Valkenburgh, echoed a partially optimistic sentiment. He claimed that there is improvement in the draft, even though there are still problems that have not been addressed.
Industry division stalled the crypto bill markup in the Senate. Such stalling underscores the level of fragmentation among crypto leaders. The argument does indicate a bigger shift in crypto policy approach.
In the case of Coinbase and other crypto companies, the crypto bill should be supported by meaningful amendments. The firms are not yet willing to have a bill that they considered to be flawed.
Source: https://coingape.com/why-crypto-firms-like-coinbase-oppose-market-structure-bill/
