The executive director of the President’s Council of Advisors on Digital Assets on Tuesday took aim at Coinbase’s decision last week to withdraw support for the Senate’s crypto market structure bill, the latest sign that lawmakers are growing weary of industry players weighing on their short-term business exposure.
“No bill is better than a bad bill,” began Patrick Witt in his tweetreferencing comments from Coinbase CEO Brian Armstrong when his exchange withdrew its support for the CLARITY Act. “What a privilege to be able to say these words thanks to President Trump’s victory and the pro-crypto administration he has assembled.”
On January 14, Armstrong publicly withdrew the exchange’s support for the bill alongside other industry players shortly before a planned markup, citing concerns over provisions on stablecoin rewards, tokenized shares and regulatory reach.
In his tweet, Witt said delaying the legislation was unrealistic and warned that rejecting imperfect rules now risks making regulations much stricter under Democratic leadership.
“Do we take advantage of the opportunity to pass a bill now, with a pro-crypto president, control of Congress, excellent SEC and CFTC regulators to write the rules, and a healthy industry? Or will we fumble and allow Democrats to write punitive legislation in the wake of a future Dodd-Frank financial crisis?” he wrote.
Witt’s comments follow venture capital firm Andreessen Horowitz, whose top crypto executive, Miles Jennings, against Armstrong last week, saying that while the bill “isn’t perfect,” it could “create an open, decentralized future” that would be “more resistant to corporate extraction, government censorship, and algorithmic distortions.”
Coinbase Opposition to Crypto Market Structure Bill in its current form focuses on Democratic-backed, banking-industry-led changes that could restrict stablecoin yield by potentially classifying customer rewards and balance-related income as regulated interest or lending activities.
After Coinbase Reversal Forces Delay on Crypto Bill, Is There a Path Forward?
Industry observers say the risk comes from ambiguity over how different forms of return would be defined under the bill.
“The main changes are those that make it difficult to distinguish between issuer-paid interest and activity-based rewards, particularly where liquidity provision or transaction-based incentives risk being treated as prohibited yield,” said Jakob Kronbichler, CEO of blockchain lending marketplace Clearpool. Decrypt.
