Three of the largest U.S. crypto exchanges — Coinbase, Kraken, and Gemini — are quietly lobbying Senate Agriculture Committee leaders to remove a key investor-protection clause from a flagship digital asset bill. The clause would require registered 'digital commodity exchanges' to list only tokens 'not readily susceptible to manipulation,' according to Politico. The firms submitted redlines earlier this year urging lawmakers to delete the requirement.
What the exchanges are asking to remove
In a joint letter, the three exchanges told senators that 'millions of Americans are participating in digital asset markets without the federal regulatory protections they deserve' and insisted that 'every element of our legislative engagement has been aimed at changing that — by expanding oversight, not limiting it.' They argued that importing the Commodity Exchange Act's high bar for futures and swaps — 'not readily susceptible to manipulation' — into spot markets would 'significantly raise the bar for listing smaller, less liquid tokens' and could be weaponized by a future CFTC chair 'to throttle innovation' by refusing to certify new assets.
Status of the bill
The provision sits inside the Senate Agriculture Committee's draft Digital Commodity Intermediaries Act, a market-structure framework first floated in late 2025 by Chair John Boozman and Sen. Cory Booker to give the CFTC explicit authority over 'digital commodities.' A client alert from McGuireWoods noted that any trading facility offering a cash or spot market in a digital commodity would have to register as a 'digital commodity exchange,' with obligations modeled on existing CFTC rules for futures venues. Exchanges 'may list only digital commodities 'not readily susceptible to manipulation' and must certify each listing to the CFTC.' The Agriculture Committee advanced its portion of the bill along party lines in late January, but major surgery is expected before it hits the Senate floor. Republicans will need Democrats on both the Agriculture and Banking Committees to sign off on a final package that can clear the 60-vote filibuster hurdle.
Existential fight for long-tail business
For Coinbase, Kraken, and Gemini, the manipulation test is existential for their long-tail business. As Politico reports, the exchanges 'strongly support the readily susceptible to manipulation standard in traditional futures and swaps markets,' but argue that 'importing a standard that doesn't make sense for spot crypto' would 'inadvertently hamstring the agency, the industry [,and] consumers.' Paul Grewal, Coinbase's chief legal officer, told Bloomberg earlier this year that the company could even reconsider its support for the overall market-structure package if it ends up with restrictions beyond 'enhanced disclosure requirements.' Industry sources say exchanges are also lobbying Senate Banking Committee members to soften related language, warning that if the manipulation test stays intact, many 'small, low-liquidity tokens' will simply never make it to regulated platforms — instead trading only on offshore venues and in DeFi, where U.S. regulators have the least visibility and leverage.