Why Coinbase and Crypto Firms Oppose FIT21 Bill: Regulatory Concerns Explained

Major cryptocurrency companies, including Coinbase, have withdrawn their support from the significant digital asset regulation bill known as the Financial Innovation and Technology for the 21st Century Act (FIT21). Initially backed by industry leaders seeking regulatory clarity, the bill has faced criticism for provisions that could grant excessive authority to the Commodity Futures Trading Commission (CFTC) over digital commodities. Critics argue this might create a fragmented regulatory landscape, leaving certain assets in a jurisdictional gap between the CFTC and the Securities and Exchange Commission (SEC). The core concern is that the bill, in its current form, may fail to provide the clear, consistent rules necessary for the crypto industry's growth in the United States, potentially stifling innovation. This shift highlights the ongoing tension between the crypto sector's desire for defined regulation and the specifics of proposed legislative frameworks.