Crypto Exchanges Ask Lawmakers to Delete Risky Tokens Language from Clarity Act

Major crypto exchanges are reportedly stepping up efforts to influence legislation in Washington, seeking changes to a proposed market-structure measure that could significantly affect how digital assets are traded in the U.S.

According to reporting from Politico, three major crypto platforms, Gemini, Coinbase, and Kraken, urged lawmakers to remove wording from the legislation that would limit trading to digital assets considered unlikely to be manipulated. Industry representatives reportedly argued that such language could make it harder for exchanges to support smaller or less-established tokens, potentially shrinking market access for emerging projects.

The dispute surfaced after the Senate Agriculture Committee moved forward with its version of the legislation earlier this year. The proposal forms part of a wider effort to establish clearer rules for the crypto market, an area that has long operated amid overlapping oversight and legal uncertainty.

Coinbase Chief Executive Brian Armstrong later voiced concerns about the measure, stating that the proposal could not gain support in its current form. Among the issues drawing criticism are provisions connected to tokenized equities, an area that has become increasingly important as firms explore ways to bring traditional financial assets onto blockchain-based platforms.

Coinbase Chief Policy Officer Faryar Shirzad later dismissed renewed attention to the matter as outdated, suggesting the conversations around the disputed language have been ongoing throughout the legislative review process.

The lobbying effort comes at a time when regulators appear increasingly aligned on how to oversee digital assets, even as Congress struggles to finalize comprehensive legislation. In March, the Securities and Exchange Commission and the Commodity Futures Trading Commission signaled plans to work more closely on crypto enforcement and oversight.

At the center of the broader debate is the CLARITY Act, a market-structure proposal that moved through the House last year and seeks to define regulatory responsibilities more clearly. If approved, the measure would place the CFTC in a leading role overseeing much of the digital asset market, while preserving an important supervisory role for the SEC.

Industry groups have remained deeply involved in discussions surrounding the bill’s development. Exchange operators and other stakeholders argue that overly restrictive listing standards may discourage innovation by reducing opportunities for newer or lower-volume tokens to gain visibility. Critics, however, maintain that stronger safeguards are necessary to protect investors and prevent manipulation in an often volatile marketplace.

Recent negotiations have added another layer to the debate. Last week, representatives from the banking and crypto industries reportedly reached a compromise involving stablecoin yield, reviving expectations that at least parts of the legislation could gain traction in the Senate Banking Committee. Some observers believe committee discussions could begin within days, while others expect lawmakers to push toward a broader Senate vote before the August recess.

The White House has also signaled interest in advancing legislation. Patrick Witt, a senior adviser on crypto matters, reportedly indicated that the administration hopes to see progress move quickly, targeting House action by early July following expected Senate activity in June.

Any progress made during the consideration of this key legislation will be tracked by crypto firms like American Bitcoin Corp. (NASDAQ: ABTC).

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