Coinbase, Kraken, and Gemini are urging U.S. senators to strike a clause from the Digital Asset Market Structure Bill that would bar exchanges from listing tokens deemed “readily susceptible to manipulation,” warning it would effectively kill compliant listings for small-cap coins.
According to Politico and subsequent reporting summarized by CrowdfundInsider, the three U.S. centralized exchanges submitted redlined edits to Senate Agriculture Committee staff asking them to delete language that would allow only digital commodities “not readily susceptible to manipulation” to be listed on registered “digital commodity exchanges.” That standard mirrors a long-standing Commodity Futures Trading Commission (CFTC) test for futures markets, where contracts can be denied or delisted if the underlying is too easy to manipulate. But in the spot-token context, Coinbase Federal Policy Director Robin Cook called it a “chicken-and-egg problem”: how can a token become liquid and less vulnerable to manipulation without first being listed on a major venue.
Why Coinbase, Kraken and Gemini are fighting the clause
In their edits, the exchanges warned that grafting a futures-style manipulation test into the spot-token regime would “effectively shut small, low-liquidity tokens out of regulated venues and hand future CFTC chairs a blunt tool to choke innovation.” They argue that while the goal of preventing manipulation is shared, applying a binary “not readily susceptible” bar at the listing stage ignores how liquidity and surveillance actually work in crypto spot markets, where even large-cap assets can be volatile and thin during stress. Instead, the firms are pushing for a “tailored framework” based on robust market-surveillance obligations, disclosure, and ongoing risk monitoring, rather than an ex ante veto focused on theoretical manipulability.
As crypto.news has reported, Coinbase, Kraken and Gemini have told lawmakers that the clause could create a de facto whitelist regime where only a handful of large tokens like Bitcoin and Ethereum pass muster, while thousands of smaller projects are forced onto unregulated offshore platforms. “Millions of Americans are participating in digital asset markets without the federal regulatory protections they deserve,” the companies said in one joint message, insisting that their goal is “expanding oversight, not limiting it” — but in a way that “does not come at the cost of market access.” That argument fits into a broader industry push for comprehensive U.S. market-structure rules, with more than 120 firms signing a recent letter urging the Senate Banking Committee to move forward on the CLARITY Act, as covered in another crypto.news story.
Inside the Digital Asset Market Structure Bill fight
The contested language sits inside a sweeping digital asset market-structure package that would, for the first time, bring spot “digital commodities” — essentially non-security tokens akin to Bitcoin and Ether — under direct CFTC supervision via a new class of registered digital commodity exchanges. Under a section-by-section draft released by House and Senate negotiators, those exchanges would be “allowed to list only those digital commodities that are not susceptible to manipulation” and for which they have performed diligence on market structure and underlying networks. The Agriculture Committee, which oversees the CFTC, controls half of the bill, while the Senate Banking Committee handles provisions that set security-token and stablecoin rules, leaving the listing standard a key battleground in inter-committee talks.
Industry advocates say that if the “not readily susceptible to manipulation” language survives, it could incentivize developers to launch tokens abroad or rely on decentralized exchanges that fall outside the bill’s registration perimeter, undermining the goal of bringing activity onshore. On the other hand, some market-abuse experts and consumer groups have praised the clause as one of the few hard brakes on listing risky, thinly traded assets that have been frequent targets of wash trading and pump-and-dump schemes, concerns crypto.news has explored in prior enforcement-focused stories. With time running out in the current Congress, the exchanges’ lobbying blitz underscores how much of the future small-cap token market could hinge on a few lines of statutory language — and how fiercely both sides are prepared to fight over what “manipulation” should mean in U.S. crypto law.
