Coinbase Claims ‘Clarity Act Is an STO Ban’... Industry Says ‘Nonsense’

A review of the U.S. digital asset (cryptocurrency) market structure bill (the Clarity Act) was derailed after strong pushback from Coinbase, the largest crypto exchange in the United States. However, tokenized securities (ST) specialists that would be directly affected by the legislation pushed back, saying “Coinbase’s claims are exaggerated,” and voiced support for moving the bill forward.

The U.S. Senate Banking Committee said it had abruptly canceled the scheduled markup of the digital asset market structure bill. The decision came just hours after Coinbase CEO Brian Armstrong sharply criticized the latest draft, saying it “is effectively the same as banning the issuance of tokenized stocks.” A new date for reconsideration has not yet been set.

According to CoinDesk on the 15th (local time), unlike Coinbase’s effort to block the legislation, companies operating tokenized securities businesses on the ground offered the opposite interpretation. They argue the bill does not kill the tokenized securities ecosystem; rather, it is a necessary step toward institutional adoption.

Carlos Domingo, CEO of Securitize, said, “The current draft does not kill tokenized stocks,” adding, “Making it clear that tokenized securities are ‘securities’ and requiring them to follow existing rules is a key step in integrating blockchain into traditional markets.”

Dinari CEO Gabe Otte also said, “I do not interpret the Clarity Act draft as a ban on issuing token securities,” adding, “It merely reaffirms that tokenized stocks must operate within securities laws and investor-protection standards.”

Alexander Zozos, general counsel at Superstate, said, “The real value of this bill lies in clarifying the nature of digital assets whose status as securities is ambiguous,” adding, “Tokenized stocks or bonds that are already clearly securities fall under the jurisdiction of the U.S. Securities and Exchange Commission (SEC).”

Some in the industry also suggest that Coinbase’s pushback is driven by a desire to keep competitors in check. Citron Research, a short-selling-focused research firm, said, “Coinbase’s opposition to the bill is not about investor protection,” adding, “It may be concerned that if the bill passes, licensed competitors will gain an advantage.”