A scheduled markup of the pivotal Digital Asset Market Clarity Act (CLARITY Act) by the U.S. Senate Banking Committee has been postponed indefinitely following public opposition from Coinbase, according to reports from crypto journalist Eleanor Terrett. The delay, announced on January 15th, leaves the timeline for further consideration uncertain. The CLARITY Act, a comprehensive regulatory framework intended to bring clarity to the digital asset sector, is now stalled in both the Senate Banking and Agriculture Committees. The Agriculture Committee had previously postponed its own review to later this month due to bipartisan disagreements. Industry participants had initially welcomed the legislation as a potential guidepost. However, the draft text proposed by the Banking Committee has drawn sharp criticism for imposing what many perceive as overly stringent requirements. The proposed rules would establish a new regulatory regime covering token definitions, fundraising, disclosures, and decentralized finance (DeFi) protocols. Key provisions of the draft legislation include: * **Token Classification:** Native blockchain tokens (e.g., ETH, SOL) would be classified as “Network Tokens” and not deemed securities but subject to disclosure rules. Tokens from decentralized applications (DApps) would be labeled “Ancillary Assets,” considered investment contracts eligible for registration exemptions but with transfer restrictions. * **Strict Disclosure and Lock-ups:** Projects would be required to submit detailed disclosures to the SEC at least 30 days before a token sale and continue semi-annual reporting for three years, or until the project is officially certified as “decentralized” by the SEC. Founders and insiders would face significant lock-up periods on their token holdings. * **Fundraising Limits:** Token sales would be exempt from SEC registration only if they raise less than $50 million annually and less than $200 million in total, and if the raised funds are held in third-party custody. * **DeFi and Developer Rules:** DeFi protocols deemed controllable by an individual or group would be required to register as securities intermediaries. Independent developers contributing code would generally be exempt, provided they lack control over protocol rules. * **Broker-Dealer and Bank Rules:** Digital asset brokers and exchanges would be subject to stringent anti-money laundering (AML) and know-your-customer (KYC) requirements. Banks would be permitted to engage in digital asset custody, trading, and stablecoin issuance. Coinbase CEO Brian Armstrong publicly criticized the draft, arguing it effectively bans tokenized stocks, grants the government excessive surveillance over DeFi, expands SEC overreach, and unfairly advantages banks by prohibiting rewards on stablecoins. The legislative process is further complicated by political dynamics. While the Republican party generally favors a lighter regulatory touch to foster innovation, they face pressure from Democrats who advocate for stronger investor protections. With a 53-seat majority, Republicans need at least seven Democratic votes to overcome a potential filibuster, leading to significant compromises in the current draft. While some venture capital firms, like a16z, argue that passing any form of the bill is preferable to further delay, the current version is viewed by many in the industry as effectively assimilating cryptocurrencies into the existing traditional financial regulatory framework, treating them not as a novel asset class but as another form of security.