Cardano founder Charles Hoskinson has launched a sharp public critique of Ripple CEO Brad Garlinghouse's support for the draft Digital Asset Market CLARITY Act, exposing a deep ideological rift within the crypto industry over regulatory strategy. The debate intensified after Garlinghouse praised the bill on January 14, 2026, calling it a "massive step forward" and arguing that "clarity beats chaos." Hoskinson responded four days later with a 30-minute video, dismissing that logic and urging the industry to resist what he described as structurally harmful rules.
Hoskinson's core argument is that "bad regulation is worse than no regulation." He contends the CLARITY Act, in its current form, would primarily benefit large financial institutions and traditional banks while locking the broader crypto sector into a restrictive, innovation-stifling framework for a generation. He specifically warned that the bill's vague definitions and lack of consumer protection focus could lead to regulatory overreach, particularly harming decentralized finance (DeFi) and smaller Layer-1 projects.
A central concern for Hoskinson is the bill's perceived expansion of SEC authority, treating most digital assets as securities by default and forcing projects to prove they are "sufficiently decentralized" to escape that classification. He views this as a backward burden of proof that empowers an agency he considers hostile to crypto. He also cited political timing, suggesting powers granted now could be used more aggressively by future lawmakers.
Garlinghouse's pragmatic stance holds that prolonged regulatory uncertainty is worse than an imperfect framework, as it discourages innovation and pushes activity offshore. He believes passing a bill creates a foundation that can be refined, allowing institutions to engage with reduced legal risk.
Leading exchange Coinbase has also weighed in, aligning with Hoskinson's warnings. A company representative stated the CLARITY Act would likely leave consumers worse off and restrict innovation, making it harder for smaller projects to thrive. Despite the regulatory clash, Hoskinson expressed optimism about Cardano's future, highlighting potential cross-chain collaborations with networks like Solana to bring privacy features and better interoperability to the ecosystem.
