New Crypto Bill Draft Aims to Curb Influence of Major Crypto Firms

Lawmakers in several countries are taking a more aggressive stance against the outsized influence of major cryptocurrency firms.

Overview

In a May 5 post on X, Justin Slaughter, Vice President of regulatory affairs at Paradigm, described the discussion draft—spearheaded by House Agricultural Committee Chair Glenn Thompson and Financial Services Committee Chair French Hill—as an “incremental but significant” revision of the Financial Innovation and Technology for the 21st Century Act (FIT21). 

A new draft crypto bill, currently under review in a joint parliamentary committee, aims to introduce stricter rules around governance, lobbying, and market concentration. The bill responds to growing concerns that the unchecked power of leading crypto exchanges and service providers may threaten investor protection and market fairness. According to those familiar with the draft, the bill proposes caps on political contributions by crypto firms, mandatory disclosure of lobbying activities, and increased scrutiny of mergers and acquisitions in the crypto space.

If passed into law, these measures could significantly alter the landscape for industry giants like Binance, Coinbase, and Kraken. Critics argue that while the bill is well-intentioned, it may have unintended consequences for the broader digital asset ecosystem. Smaller firms fear being caught in a regulatory net designed to constrain their larger rivals, while innovation-focused advocates worry that overly restrictive policies could stifle growth.

Taming the Giants: Why the Bill Targets Big Crypto

One of the central motivations behind the bill is to reduce the concentration of power among a handful of major players in the crypto industry. Over the past five years, a few centralised exchanges and blockchain firms have amassed significant market control, handling billions in daily trading volume and wielding influence over digital asset listing practices, liquidity, and regulation.

The collapse of FTX in 2022 served as a stark reminder of the dangers posed by centralised actors operating with minimal oversight. Since then, lawmakers have increasingly focused on building a framework that ensures accountability and decentralisation. The new bill addresses this by requiring transparency in governance structures. Crypto firms above a certain valuation threshold must disclose board decisions, executive compensation, and third-party affiliations. 

Additionally, any firm controlling more than 25% of market trading volume could be flagged for review under anti-monopoly provisions. Such moves echo existing regulations in traditional finance, but applying them to the decentralised world of crypto is no easy task. Industry experts note that crypto companies often operate across jurisdictions, making enforcement difficult. Nonetheless, the bill represents a first step in aligning crypto with mainstream financial regulation.

Lobbying Under the Microscope

Another key focus of the bill is limiting the influence of crypto firms in shaping public policy. As the crypto industry has matured, so has its lobbying presence in Washington, Brussels, and other power centres. Reports show that crypto lobbying spending surged by over 120% in the past two years, with major firms hiring former regulators and policymakers to advocate.

Under the proposed bill, any crypto firm that spends more than a specified amount on lobbying must submit detailed quarterly reports outlining the issues they’ve advocated for and the officials they’ve met. Political contributions from crypto firms or their executives will also be subject to caps to prevent undue influence.

Supporters argue that this brings much-needed transparency to a rapidly evolving sector. “This is about leveling the playing field,” said one policymaker involved in drafting the bill. “We want to ensure that crypto isn’t just for the rich and powerful, but remains open and fair for everyone.”

Industry Reaction: Divided but Watching Closely

The response from the crypto industry has been mixed. Some smaller players have welcomed the proposal, viewing it as a way to rein in dominant firms that often dictate market norms. “We support regulation that promotes fair competition,” said the CEO of a mid-sized exchange. 

The CEO added, “Too much power in the hands of a few is bad for innovation.” However, larger companies have pushed back, warning that the bill could lead to regulatory overreach and hinder global competitiveness. “While we agree on the need for transparency, these provisions could create burdensome compliance costs,” said a spokesperson from a central exchange.

The bill is still in draft form and subject to amendments, but it marks a clear shift in tone from policymakers. As the crypto space matures, so does the accountability and fair play conversation. Whether this bill becomes law or sparks broader international reform, one thing is clear: the era of hands-off crypto regulation is ending.