The release of the bipartisan crypto market structure bill text on Monday has left much of the crypto community dissatisfied.
Most critics have directed their frustration at banking lobbyists. However, a smaller group argues that the real beneficiaries are large crypto firms that were expected to advocate for the industry’s broader interests.
Crypto Reacts to a 278-Page Proposal
After months of negotiations, Senate Banking Committee Chairman Tim Scott released the text of a negotiated bill outlining a framework for the crypto market. The move brought the CLARITY Act one step closer to passage, with the legislation aiming to establish clearer rules for the digital assets market.
“This bill reflects months of serious work, ideas, and concerns raised across the Committee, and it gives everyday Americans the protections and certainty they deserve,” Scott said in a statement.
What was supposed to be a moment of joy quickly gave way to backlash as influential voices began reviewing the 278-page proposal.
Early criticism focused on provisions widely seen as favoring banking interests, which have long clashed with crypto advocates over concerns that digital assets could erode traditional market share.
Attention mostly shifted to sections addressing stablecoin yields. The latest draft restricts companies from paying interest solely for holding balances and limits the scope of reward offerings.
However, not all crypto firms would face negative consequences if lawmakers approve the bill in its current form.
Large, well-established crypto players appear positioned to benefit the most, raising questions about where smaller participants ultimately fit within the new regulatory framework.
Why Big Crypto Benefits Most From Current Proposal
To better understand who stands to gain from the bill in its current form, BeInCrypto spoke with Aaron Day, a longtime crypto entrepreneur and regulatory critic who has closely reviewed the proposal.
The markup introduces sweeping compliance obligations.
These include real-time trade surveillance, expanded registration requirements, and the mandatory use of qualified custodians. Together, these measures significantly raise the cost of operating in the US crypto market.
As a result, Day argued that only well-established crypto firms can absorb these upfront burdens. Smaller players will face a structural disadvantage from the outset.
“You’re describing infrastructure that Coinbase already has and that a startup in a garage cannot afford. Coinbase spent years and millions building regulatory relationships. This bill essentially codifies their competitive advantage into law,” Day told BeInCrypto.
Day added that Circle similarly stands to benefit. According to him, the bill’s stablecoin provisions favor established, fully regulated issuers. This positions the company behind USDC to gain the most if the legislation is approved in its current form.
In the meantime, the proposal also mandates trade surveillance. Under these rules, every exchange must implement real-time monitoring.
“Chainalysis wins because mandatory surveillance means permanent demand for their blockchain analytics tools. Every exchange now needs what they’re selling. It’s not a conspiracy, it’s just how regulatory capture works,” Day added.
He stressed that this dynamic reflects a broader pattern in which regulatory frameworks tend to solidify existing power structures rather than disrupt them.
“The incumbents help write the rules, then the rules happen to favor the incumbents.”
As a result, smaller players will face tough choices, with decentralized finance (DeFi) being the most vulnerable segment.
When Permissionless Finance Requires Government Permission
According to Day, small exchanges will have to choose between spending heavily to meet compliance requirements or exit the market altogether.
As for DeFi, the bill introduces language that could, for the first time, require protocol developers to register with federal regulators. Such a move would effectively treat builders as regulated entities rather than neutral software creators.
“The whole point of DeFi was that no one needed permission to build or participate. If you need government approval to deploy a smart contract, you’ve fundamentally broken what made it interesting,” Day told BeInCrypto.
Though the bill doesn’t ban DeFi outright, Day cautioned that it may create enough legal uncertainty that American developers may simply build elsewhere.
However, the most jarring aspect of the proposal may be its direct conflict with Satoshi Nakamoto’s original vision for Bitcoin.
Bitcoin’s Cypherpunk Roots Under Pressure
Bitcoin was originally designed as a peer-to-peer electronic cash system intended to eliminate the need for trusted intermediaries.
Nakamoto’s pseudonymity and Bitcoin’s cypherpunk roots highlighted the importance of financial privacy as a core principle, not a secondary feature.
“When every transaction is monitored, reported, and potentially shared with foreign regulators, you’ve rebuilt the surveillance architecture of the traditional banking system on top of blockchain. You’ve kept the technology and thrown away the philosophy,” Day said.
He suggested that the Bitcoin community itself may be divided in its response.
Some will argue that Bitcoin remains untouched, as users can still self-custody their assets and operate their own nodes. However, the on-ramps and off-ramps, particularly centralized exchanges where most users access Bitcoin, would fall firmly under regulatory control.
As a result, using Bitcoin would increasingly resemble using a traditional bank account.
“I’m not against regulation in principle. I’m against regulation designed by incumbents to benefit incumbents while being sold to the public as consumer protection. The pattern repeats across industries and across administrations. Both parties participate because both parties are funded by the same interests,” Day concluded.
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