Cardano founder and early Ethereum contributor Charles Hoskinson has turned sharply against the latest version of the US crypto market structure “Clarity Act,” calling it a “horrific trash bill” that could entrench the Securities and Exchange Commission’s power and choke off future American crypto projects.
His comments come as the legislation inches closer to passage in Congress and industry lobbyists scramble over last‑minute compromises.
Everything Starts as a Security: Hoskinson’s Core Objection
Hoskinson’s main attack centers on one design choice: under the current draft, “all new cryptocurrency projects” would reportedly be treated as securities by default.
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Legacy networks such as Bitcoin, Ethereum, XRP, and Cardano are likely to be grandfathered in, he says, but “everybody else starts as a security.”
That starting point, combined with heavy rule-making discretion, is what he calls a “wet dream” for an adversarial SEC.
He argues that security status blocks early liquidity, makes it hard to “broaden the ownership of the token,” and undermines basic token‑economics: “As a security, there is no token go up. So how do you get people to invest in your ecosystem and build in your ecosystem?”
Hoskinson also highlights what he describes as “numerous procedural attack vectors to keep you as a security forever,” comparing the potential outcome to New York’s BitLicense regime and FDA‑style regulatory gridlock.
Developer protections, he says, were “stripped out” after more than a hundred amendments, leaving the bill vulnerable to “Tornado Cash plus plus”‑type crackdowns.
Banks, Stablecoin Yield & a Super-Split Crypto Industry
While crypto advocates and the White House have pushed to resolve remaining disputes, one issue has stalled progress: yield on stablecoins. A White House crypto advisor says “crypto to their credit has made considerable strides” toward compromise and now “it’s time for the banks to reciprocate.”
Jamie Dimon, CEO of JPMorgan Chase, rejects that premise.
In an interview cited in the video, he argues that stablecoin “rewards” are effectively interest and should be treated as banking activity: “You want to be a bank, become a bank.” He insists that if platforms hold balances and pay yield, they should face full bank regulation, including capital, liquidity, FDIC insurance, and community obligations.
Hoskinson points out that under the current design, even large players may lose: “Armstrong can’t even get his yield‑bearing stablecoins,” he notes, arguing that neither centralized exchanges nor DeFi protocols like Uniswap or prediction markets meaningfully benefit under the bill’s present language.
What Passage Of Clarity Act Means For Crypto Investors
The host stresses that this is not a fringe policy skirmish but the framework likely to “define the next decade for crypto in the United States.”
If the bill passes largely unchanged, banks are expected to “fully be able to get into the crypto industry,” collapsing today’s separation between traditional finance and digital assets into a single “digital assets industry.”
Supporters of compromise frame it as a starting point that can be amended later.
Hoskinson counters that if that’s true, “why is there such a rush to pass it?” His broader fear is that once the SEC is armed with clear statutory authority and default‑security treatment, the US may get regulatory certainty at the cost of domestic innovation and new on‑chain experiments.
For investors, the stakes run beyond short‑term price moves in Bitcoin or stablecoins.
The final shape of this bill could determine where the next generation of protocols are launched, how easily tokens achieve liquidity, and whether US‑based DeFi and Web3 development remains viable — or is pushed offshore.
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People Also Ask:
According to Hoskinson, networks like Bitcoin, Ethereum, XRP, and Cardano are likely to be grandfathered in, with the harshest impact falling on new projects.
The video highlights stablecoin yield as the key sticking point, with banks resisting any arrangement that lets non‑banks pay interest‑like rewards on balances.
Hoskinson claims “there’s nothing in this for DeFi,” naming Uniswap and prediction markets as examples that gain little from the current draft.
Yes. The legislation is still moving through committee markups, and both industry and banking lobbyists are pressing for last‑minute adjustments before any final vote.
