Crypto Platform Slams Senate Draft, Warns of Privacy and Innovation Fallout

Source: Coindoo Original Title: Coinbase Slams Senate Draft, Warns of Privacy and Innovation Fallout Original Link: A major crypto compliance platform has drawn a clear line against a newly proposed U.S. Senate banking bill, warning that the draft would do more harm than good to the digital asset industry if passed in its current form.

In a public statement, the company’s leadership said they reviewed the draft legislation over a forty-eight-hour period and ultimately concluded they could not support the bill. According to their assessment, the proposal introduces structural risks that would leave the U.S. crypto sector worse off than it is today.

Key takeaways:

• The platform has formally opposed the current version of the Senate banking bill.
• Leadership says the draft is worse than maintaining the status quo.
• The company believes the bill undermines innovation, privacy, and fair competition.
• They are calling for a revised draft rather than pushing the current version forward.

At the center of their criticism is what was described as a de facto ban on tokenized equities. They argued that the language would effectively block innovation around on-chain representations of traditional assets—an area widely seen as a critical bridge between legacy finance and blockchain-based markets.

The draft also raises alarms around decentralized finance. Certain provisions would impose sweeping restrictions on DeFi, granting the government broad access to users’ financial data while eroding basic privacy protections. In their view, these measures contradict the core principles of open blockchain systems.

Regulatory imbalance concerns

Another major concern is a shift in regulatory power. The platform warned that the bill weakens the role of the Commodity Futures Trading Commission, effectively subordinating it to the Securities and Exchange Commission. Concentrating authority in this way would increase uncertainty for developers and slow innovation across the sector.

Stablecoins are another flashpoint. The platform claims proposed amendments would eliminate rewards tied to stablecoin holdings, a move that would tilt the playing field toward traditional banks by allowing them to suppress crypto-based competition rather than compete on equal terms.

Despite the criticism, the company acknowledged the bipartisan work behind the legislation. They said they respect lawmakers’ efforts to find common ground but stressed that compromise should not come at the cost of economic freedom or technological progress. “We’d rather have no bill than a bad bill,” they stated, adding that the current draft fails to meet that standard.

The platform framed its stance as part of a broader push to ensure crypto is regulated alongside—rather than beneath—other financial services. They reiterated that clear, balanced rules are essential if the U.S. wants to remain competitive in digital finance rather than pushing innovation offshore.

For now, the company says it will continue engaging with policymakers in hopes of shaping a revised version of the bill—one that protects privacy, preserves innovation, and provides regulatory clarity without consolidating power or limiting consumer choice.