Cardano (CRYPTO: ADA) founder Charles Hoskinson slammed Ripple (CRYPTO: XRP) CEO Brad Garlinghouse for backing the Senate’s Clarity Act draft, warning the bill hands too much power to the SEC and locks crypto into flawed regulation that favors banks over innovation.

The Fight Over “Clarity Beats Chaos”

Garlinghouse praised the Senate Banking Committee’s version of the Clarity Act on January 14, calling it a massive step forward despite imperfections.

“Ripple and I know firsthand that clarity beats chaos, and this bill’s success is crypto’s success,” Garlinghouse wrote on X. 

“I remain optimistic that issues can be resolved through the mark-up process,” he added.

Hoskinson fired back in a 30-minute video, rejecting the idea that bad regulation is better than no regulation.

“Sorry Brad, it’s not better than chaos,” Hoskinson said. “Take the chaos and fight for what’s right!”

Why Hoskinson Says The Bill Hands Power To SEC

The Clarity Act divides crypto regulation between two agencies, with the SEC overseeing securities and the CFTC regulating commodities like Bitcoin (CRYPTO: BTC).

But the current draft makes every cryptocurrency a security by default. 

Projects must demonstrate sufficient decentralization to escape SEC control and come under CFTC oversight instead.

Hoskinson argues this backwards approach forces crypto developers to ask the SEC for permission rather than building freely. 

He pointed out the irony: the industry would be handing control to the same agency that spent years suing companies, sending subpoenas, and shutting down businesses.

The bigger problem is permanence. Once Congress passes a law, changing it takes years or decades. 

If the industry accepts flawed rules now to get “clarity,” those restrictions could lock in for a generation—even as technology evolves and the original concerns become outdated.

Coinbase CEO Joins The Fight

Brian Armstrong, CEO of Coinbase Global Inc. (NASDAQ:COIN), sided with Hoskinson against the current draft.

Armstrong criticized the bill for including a “de facto ban on tokenized equities” and “draft amendments that would kill rewards on stablecoins.”

He made his position clear: the industry would rather have no bill than accept one that gives excessive power to regulators and limits open innovation.

Why Garlinghouse Backs The Bill Anyway

Garlinghouse takes the opposite view: imperfect rules now beat ongoing chaos.

Ripple spent years fighting the SEC in court over XRP, burning money and opportunities while competitors in clearer jurisdictions moved ahead.

From his perspective, the current system—where nobody knows what’s legal until they get sued—has already pushed innovation offshore. 

He believes lawmakers can fix the SEC power problems during markup rather than rejecting the bill entirely and starting over.

Senate Delays Vote As Industry Splits

The Senate Banking Committee delayed its scheduled vote on the Clarity Act after backlash from Armstrong, Hoskinson, and others.

“I’ve spoken with leaders across the crypto industry, the financial sector, and my Democratic and Republican colleagues, and everyone remains at the table working in good faith,” Senate Banking Committee Chair Tim Scott said when announcing the delay.

The postponement gives opponents time to lobby for changes, but it also risks the bill losing momentum or getting watered down further.

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