Novogratz Urges Congress to Pass Crypto Bill Even If It’s “Not Perfect”
Why Is Crypto Legislation Back in Play?
A broad bill to regulate the US cryptocurrency market could be finalized within weeks, according to Michael Novogratz, as lawmakers and industry representatives attempt to salvage negotiations that unraveled just days ago. Speaking to CNBC, the Galaxy CEO argued that passing legislation matters more than crafting a flawless framework.
“I do think there will be a compromise on this,” Novogratz said. “I don’t think it will be great for crypto, but I think it’ll be fine.” He added that the industry should accept progress even if the outcome falls short. “And if it’s not perfect, who cares? We’ll fix it in time.”
Democratic staff from the Senate Agriculture Committee and the Committee are scheduled to hold a call with crypto industry representatives at noon Friday to discuss next steps on market structure legislation, according to people familiar with the plans. The meeting follows the abrupt cancellation of a Senate Banking Committee markup that had been expected to advance the bill.
Investor Takeaway
What Caused the Negotiations to Collapse?
The latest breakdown came later than Senate Banking Committee staff released a revised version of the bill late Monday night, spanning more than 270 pages. Lawmakers were given until Tuesday later thannoon to file amendments, resulting in more than 70 proposed changes ahead of a planned Thursday markup.
Tensions escalated around the treatment of stablecoin rewards. Banking groups have criticized provisions tied to the GENIUS stablecoin law, which passed over the summer. While the law bars stablecoin issuers from paying direct interest to holders, it allows third-party platforms to offer rewards. Crypto firms argue that banks are viewking to limit competition, noting that the issue was already debated earlier in the year.
The disagreement spilled into public view when posted on X late Wednesday that the platform could not support the bill as written. He cited concerns across four areas: tokenized equities, decentralized finance, stablecoin rewards, and the authority granted to the .
Within hours of Armstrong’s post, the Senate Banking Committee canceled its markup hearing and postponed consideration of the bill to an unspecified later date.
Why Did Coinbase Walk Away?
Coinbase’s withdrawal marked a turning point. The platform had previously supported the legislation and invested heavily in lobbying for a . According to a source familiar with the discussions, the decision to pull support was not taken lightly and followed internal debate.
In a CNBC interview, Armstrong said he preferred legislation over continued uncertainty but could not back the revised draft. “Frankly, I’d rather have no bill than a poor bill,” he said.
He warned that the latest version would damage existing business lines. “The current draft text that was shown to us earlier this week, for instance, would kill probably three or four diverse product lines that we have already in market,” Armstrong said. He added that if the bill primarily benefits banks, Coinbase would rather operate under the existing stablecoin framework. “If this is going to be a giveaway to the banks, I’d rather just stick with GENIUS, which is already in law.”
While no single issue triggered the pullback, stablecoin rewards emerged as a central fault line. For crypto platforms, rewards are a core feature used to attract users and deploy liquidity. For banks, they represent competition with traditional deposit products.
Investor Takeaway
What Happens Next?
Friday’s call between Senate staff and industry representatives suggests lawmakers are not ready to abandon the bill. Instead, negotiations appear to be shifting into a quieter phase focused on narrowing disagreements before returning to formal committee action.
Novogratz’s comments reflect a growing view among some industry leaders that partial clarity is better than prolonged uncertainty. Market structure legislation would define regulatory boundaries for platforms, brokers, custodians, and DeFi protocols—rules that many firms say are necessary to attract long-term capital.
At the identical time, the setback highlights how fragile consensus remains. Crypto firms are wary of rules that could restrict product offerings, while banks continue to push for tighter controls around yield, custody, and market access.
