Crypto Bill Delay Risks Harsher Regulation, White House Advisor Says

A White House crypto advisor publicly criticized Coinbase over stepping back from the current US crypto market structure legislation push, warning that delaying a framework now could result in far harsher regulation later. The statement frames the current political environment as a rare window for the crypto industry to influence pragmatic rules before momentum shifts toward more punitive approaches.

In a strongly worded statement, Witt argued that while imperfect legislation may frustrate parts of the industry, abandoning the process altogether is a strategic mistake. “No bill is better than a bad bill” may sound appealing, he said, but in practice it ignores political reality.

• What Was Said
• Coinbase Draws Heat
• Why Timing Matters
• Imperfect Law vs Hostile Law

What Was Said

In a pointed message, the advisor argued that the idea of “no bill is better than a bad bill” may sound principled, but it ignores political reality. According to the advisor, a comprehensive crypto market structure bill is inevitable, & the real question is not whether one will pass, but when it will pass & who will shape it.

The advisor stressed that assuming a multi-trillion-dollar industry can continue operating indefinitely without a comprehensive federal framework is unrealistic, especially as digital assets become more integrated with mainstream financial markets.

Coinbase Draws Heat

While the comments did not detail Coinbase’s internal decision-making, they were widely interpreted as a direct rebuke of the exchange’s decision to reduce support or engagement around the current market structure bill, including the CLARITY Act.

The criticism highlights a rare public split between pro-crypto policy voices in Washington & one of the industry’s most influential corporate players, especially at a moment when federal lawmakers are actively negotiating the scope & structure of crypto oversight.

“No bill is better than a bad bill.”

What a privilege it is to be able to say those words thanks to President Trump’s victory, and the pro-crypto administration he has assembled.

But let’s not kid ourselves. There *will* be a crypto market structure bill — it’s a question of…

— Patrick Witt (@patrickjwitt) January 21, 2026

Why Timing Matters

The advisor warned that the industry is currently operating in an unusually favorable political window to shape legislation, citing:

• A pro-crypto White House posture.
• A Congress seen as more open to passing a market structure bill.
• Regulators at the SEC & CFTC viewed as capable of writing clearer rules.

The core argument is that if this opportunity is missed, a future Congress could rewrite the framework under far less favorable conditions, especially following a market shock or financial crisis.

Imperfect Law vs Hostile Law

The advisor acknowledged that the current proposal may not satisfy every stakeholder, but argued that rejecting it outright increases the odds of ending up with a more aggressive future version. He pointed to the pattern of crisis-driven regulation historically leading to sweeping, restrictive laws, suggesting that a future bill could mirror the severity of post-2008 reforms if enacted in response to a major crypto-related disruption.

In short, the advisor’s view is that an imperfect law shaped now through compromise is preferable to a hostile law shaped later without meaningful industry input.

The statement underscores a widening debate inside the US crypto sector, i.e., whether to push for incremental regulatory clarity now, even if it involves compromise, or risk waiting for a “perfect” bill that may never materialize.

As negotiations continue, the level of coordination among industry leaders may influence not only the bill’s contents, but the trajectory of US digital asset regulation for years.

If you find any issues in this blog or notice any missing information, please feel free to reach out at yash@etherworld.co for clarifications or updates.

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