Coinbase, Kraken and Gemini are lobbying Senate agriculture leaders to remove the “not easily manipulated” standard from a landmark digital asset bill, warning that it would effectively ban small, low-liquidity tokens from regulated U.S. exchanges and give the CFTC a veto over future listings.
Summary
- Coinbase, Kraken and Gemini have asked leaders of the Senate Agriculture Committee to remove a clause that limits the listings to tokens that are “hard to manipulate.”
- The companies say the standard would effectively exclude small, low-liquidity tokens from regulated venues and give future CFTC chairs a blunt tool to stifle innovation.
- The text is part of a broader market structure bill that would give the CFTC new authority over digital commodity spot markets, including Bitcoin and Ethereum.
America’s biggest crypto exchanges are quietly pushing to remove a key investor protection clause from the Senate’s flagship digital assets bill, warning it would make it nearly impossible for “small coins” to list on regulated sites.
According to Politico, Coinbase, Kraken and Gemini submitted red lines to the Senate Agriculture Committee earlier this year, urging lawmakers to remove the requirement that registered “digital commodity exchanges” can only list tokens that are “hard to manipulate.”
In a joint letter, the three companies told senators that “millions of Americans participate in digital asset markets without the federal regulatory protections they deserve” and insisted that “every element of our legislative commitment aimed to change that – expanding oversight, not limiting it.”
They added that importing the Commodity Exchange Act’s high bar for futures and swaps into the cash market – where contracts must be “unlikely to be manipulated” – “would significantly raise the bar for listing smaller, less liquid tokens” and could be used by a future CFTC chair “to strangle innovation” by simply refusing to certify new assets.
As part of the Senate Digital Products Bill
This provision is part of the Senate Agriculture Committee’s Digital Products Intermediaries bill, a market structure framework first launched in late 2025 by Chairman John Boozman and Senator Cory Booker to give the Commodity Futures Trading Commission explicit authority over “digital products.”
A McGuireWoods customer alert on the draft discussion states that any trading facility offering a cash or spot market for a digital commodity would need to register as a “digital commodities exchange,” with requirements modeled after existing CFTC rules for futures trading platforms. Exchanges “can only list digital products that are ‘hard to tamper with’ and must certify each listing with the CFTC,” including an analysis showing that the token meets statutory criteria and that the venue has adequate oversight and safeguards. McGuireWoods
The Agriculture Committee advanced its portion of the bill along party lines in late January, a committee statement noted, but everyone expects some major surgery before it reaches the Senate. Politico reports that Republicans will need Democrats on the Agriculture and Banking Committees to approve a final package that can clear the 60-vote filibuster hurdle, and negotiators are already trading changes between panels.
Crypto.news previously described this broader effort in an article on the updated Senate Agriculture bill, noting that it would, for the first time, place federally registered spot intermediaries for bitcoin and ethereum directly under the supervision of the CFTC while leaving the SEC in charge of securities tokens. The same story highlighted unresolved conflicts regarding DeFi, staking and stablecoin rewards that still stand between the project and a bipartisan agreement.
Why Coinbase, Kraken and Gemini are fighting this clause
For Coinbase, Kraken, and Gemini, the manipulation check is existential for their long-tail business. As Politico reports, the exchanges “strongly support easily manipulated standards in traditional futures and swaps markets” but argue that “importing a standard that does not make sense for spot crypto” would “inadvertently cripple the agency, the industry (and) consumers.”
Paul Grewal, Coinbase’s chief legal officer, told Bloomberg earlier this year that the company might even reconsider its support for the entire market structure if it found itself with restrictions beyond “enhanced disclosure requirements” for products such as stablecoin rewards. Crypto.news’ coverage of this standoff in an article highlighted that Coinbase views the bill as a compromise: clearer CFTC rules on one side, potential constraints on its core business on the other.
Today, the same pattern is playing out around small-cap listings. As Politico notes, industry sources say exchanges are also pressuring members of the Senate Banking Committee to soften the language on the matter, warning that if the manipulation test remains intact, many “small, low-liquidity tokens” will simply never make it onto regulated platforms. Instead, they will only trade on offshore venues and in DeFi, exactly where US regulators have the least visibility and leverage.
In a sense, this is the central tension of the bill that crypto.news pointed out in its previous article: Washington wants to drag crypto into a familiar derivatives-style regulatory framework, while the industry tries to keep enough headroom in the system to list riskier assets and offer a return without stifling the business model. It is in the struggle over a phrase – “hardly susceptible to manipulation” – that these two instincts now collide.
