The U.S. Senate is finally turning its full attention to crypto. And the message from industry insiders was loud and clear—act fast or lose global ground.
On June 24, the Senate Banking Committee’s Subcommittee on Digital Assets hosted a pivotal hearing focused on how digital asset markets should be structured—and who should be in charge. Among those testifying was Coinbase’s vice president of legal, Ryan VanGrack, who painted a stark picture of what’s at stake if lawmakers don’t act soon.
VanGrack didn’t mince words in his written testimony. He argued that the absence of clear rules was driving crypto innovation out of the U.S. and leaving everyday investors vulnerable. The vacuum, he said, is benefiting “bad actors” while discouraging good-faith players trying to build legitimate businesses in the space.
Coinbase Pushes for Clarity as Lawmakers Debate Jurisdiction
Crypto companies have been calling for regulatory clarity for years. Tuesday’s hearing showed that the Senate is, at long last, inching toward answering the call.
VanGrack, whose remit at Coinbase includes handling litigation and global enforcement issues, said the lack of a unified framework is forcing U.S.-based innovators into tough decisions. In his words, “The resulting uncertainty allows bad actors to operate, drives responsible innovators abroad, and leaves customers behind.”
A handful of senators, particularly from the Republican side, appeared to agree that the current patchwork approach is untenable. Some floated the idea of assigning more authority to the Commodity Futures Trading Commission (CFTC), while others pushed for a dual-track structure that includes the Securities and Exchange Commission (SEC). No consensus emerged—but the urgency felt palpable.
One senator even described the current structure as “regulatory whack-a-mole.”
From Silicon Valley to Singapore: Crypto Firms Are Leaving
In one of the most cited moments during the hearing, VanGrack pointed out that major players—including some started in garages in California—are now shifting operations overseas.
Coinbase, which is headquartered in San Francisco and went public in 2021, has increasingly expanded its footprint internationally. In April, it launched services in Bermuda. Last month, it received a license to operate in Ireland. That didn’t go unnoticed.
“America can’t afford to outsource innovation,” VanGrack warned senators.
The committee also heard from experts who argued that slow-moving U.S. policy was creating space for jurisdictions like Singapore, the UK, and the European Union to attract capital and talent. Those markets, unlike the U.S., have enacted comprehensive digital asset laws in recent years.
One senator summed it up like this: “If we don’t define the rules of the road, someone else will.”
Lawmakers Grapple with How to Define a Digital Asset
While there seemed to be bipartisan support for doing something, defining what qualifies as a digital asset—and how it should be regulated—is proving messy.
Senators repeatedly asked if certain tokens should be treated as securities or commodities. They also questioned how stablecoins fit into the picture, especially after the collapse of TerraUSD last year sent shockwaves through the space.
There was discussion of a potential taxonomy that could separate digital assets into different categories:
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Commodities (like Bitcoin)
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Securities (like tokenized stocks or ICOs)
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Payment tokens (such as stablecoins)
VanGrack emphasized that the industry isn’t trying to avoid regulation. “We want regulation,” he said. “We just need to know which agency to report to, and what the rules are.”
Caution vs. Innovation: The Line Senate Tries to Walk
But not everyone on the committee was sold on deregulation or rushing into crypto-friendly laws. Several senators raised concerns about consumer protection, pointing to the collapse of FTX and other scandals as cautionary tales.
One Democratic senator pushed back hard: “The last thing we need is to repeat the mistakes of the 2008 financial crisis. We need safeguards, not Silicon Valley wish lists.”
Still, even the skeptics acknowledged that crypto isn’t going away. The question isn’t whether to regulate—it’s how.
There was also fresh interest in enforcing anti-money laundering and anti-terrorism compliance more stringently, particularly after last year’s FinCEN advisory flagging certain crypto mixers as potential national security risks.
A quiet pause followed that exchange. The room knew the stakes had just shifted.
Crypto’s Path Forward Could Depend on This Session
The broader context of the hearing wasn’t lost on anyone. With the 2024 elections behind them, lawmakers are recalibrating their focus. For many, digital assets are no longer fringe.
And that’s why Tuesday’s hearing may be more than just another Capitol Hill talking shop. This is one of the first real steps toward creating a legal framework that could shape how America deals with crypto for decades to come.
VanGrack ended his testimony with a reminder: “The promise of this technology is enormous. But if we don’t act now, we may lose that promise to countries that moved faster.”
For now, all eyes are on whether Congress will move from debate to drafting—and how fast they’ll get there.
