In a recent public address, Cardano founder Charles Hoskinson issued severe criticism of the Digital Asset Market Structure and Clarity Act (H.R. 3633), commonly known as the CLARITY Bill, currently under review by the U.S. Congress, labeling it a “terrible piece of garbage legislation.” The bill passed the House with overwhelming bipartisan support of 294 to 134 in July 2025 but has since stalled in the Senate, with the key sticking point remaining the regulatory jurisdiction over yield-producing stablecoins.
The bill seeks to end the long-standing regulatory gray area facing the U.S. crypto industry by assigning oversight to two agencies: the Commodity Futures Trading Commission (CFTC) would oversee digital commodities and decentralized assets, while the Securities and Exchange Commission (SEC) would retain jurisdiction over initial offerings and security-like tokens. Under the proposed text, any token issued by a centralized team would be presumed by default to be an “investment contract asset,” i.e., a security, and could only be reclassified as a commodity after actively applying for and obtaining SEC approval.
Hoskinson pointed out that this mechanism effectively cedes all regulatory control to the SEC, creating a one-way review system with no transparent standards. He emphasized that there is no objective decentralization threshold nor independent review process, leaving the SEC both judge and enforcer—opening the door to significant abuse of power. Reflecting on his three years of involvement in legislative discussions, he revealed that all 137 amendments initially aimed at protecting developers’ rights were removed, with the final version diverging sharply from its original intent.
He further analyzed that a confrontational SEC could wield the bill to pressure new projects through rulemaking, demanding massive compliance reports, restricting smart contract functions, and forcing custody of on-chain data. “For an adversarial SEC, this is a dream scenario,” Hoskinson stated bluntly.
His critique also targeted divisions within the industry. Ripple CEO Brad Garlinghouse publicly remarked that “a flawed bill is better than no bill,” even predicting a 90% chance the CLARITY Bill would pass before April 2025. In response, Hoskinson argued the bill would only protect already established leading projects, forcing all emerging blockchain initiatives out of the U.S. market and into overseas jurisdictions.
His deeper concern lies with political risk. As Democrats increasingly tie cryptocurrency to political corruption—especially using Trump’s personal crypto holdings as a target—if Democrats regain the House in 2026 and the White House in 2028, SEC Chair Gensler’s successor would inherit a passed bill along with all yet-to-be-drafted implementing rules. At that point, the entire industry could face far harsher and more systematic regulatory pressure.
