Shares of Coinbase Global Inc (NASDAQ: COIN) and Robinhood Markets Inc (NASDAQ: HOOD) encountered significant sell-offs on Thursday amid heightened investor concern stemming from hindered progress on the proposed U.S. crypto market-structure legislation. The draft bill, anticipated to establish a comprehensive framework for the domestic cryptocurrency industry, has run into fresh obstacles that investors perceive as potentially detrimental to the growth prospects of both firms.
Earlier in the day, Coinbase’s CEO Brian Armstrong openly criticized the draft Senate Banking Committee bill, stating that the exchange could no longer back the proposed framework. Armstrong outlined several key issues with the bill in a public post, asserting it would impose restrictive measures on tokenized equities effectively amounting to a prohibition. Furthermore, he emphasized the bill’s broad surveillance standards for decentralized finance (DeFi) platforms and the erosion of authority from the Commodities Futures Trading Commission (CFTC) to the Securities and Exchange Commission (SEC). He also expressed concern that the legislation would terminate reward programs associated with stablecoins, labeling the bill’s provisions as worse than the current regulatory uncertainty.
Subsequently, Senate Banking Committee Chair Senator Tim Scott announced a brief postponement of the bill’s markup process. He reinforced that stakeholders remained engaged in ongoing discussions despite the delay. Senator Cynthia Lummis expressed disappointment with the crypto industry’s resistance to the draft language. Meanwhile, investor David Sacks and Galaxy Digital CEO Mike Novogratz encouraged negotiators to use the delay as an opportunity to work towards a viable compromise. However, Galaxy Research recently assessed the likelihood of a bipartisan crypto bill passing at approximately 25%, cautioning that failure could defer a unified regulatory framework to 2027.
Robinhood’s CEO Vlad Tenev added to the discourse by condemning persistent legislative deadlock that has impeded the availability of staking services in four U.S. states and obstructed the broker’s ability to offer tokenized stock products currently available in its European markets. He urged congressional action to pass clear rules aimed at both safeguarding consumers and enabling continued innovation within the cryptocurrency sector.
The proposed crypto market-structure bill represents a critical pivot point for Coinbase. Clear, durable regulations would enable the company’s U.S. operations to scale effectively, transitioning away from a landscape defined by case-by-case enforcement. However, as currently drafted, the bill would block tokenized equities, significantly curtail DeFi activities, and shift regulatory authority from the CFTC to the SEC—constraints that could deeply impact Coinbase’s leading product lines and future revenue streams. Conversely, a constructive regulatory framework could bring clarity regarding which crypto assets constitute securities, establish licensing pathways for exchanges, unlock institutional investor participation currently restrained due to regulatory ambiguity, mitigate ongoing litigation risks, and reduce trading volume migration to offshore platforms.
Similarly, the legislation's outcome holds considerable weight for Robinhood’s strategic vision. The company aims to integrate cryptocurrency assets comprehensively within its retail brokerage platform. A definitive set of federal regulations could harmonize disparate state and federal requirements, delineate which tokens are permissible for retail broker listings, create compliant mechanisms for staking programs and tokenized equities, lower regulatory headline risk, and sustain the company’s competitive position in crypto innovation.
Regarding market indicators, Benzinga Edge stock rankings assigned Coinbase a Momentum score of 8.46, indicating elevated volatility amid current conditions. Robinhood exhibited notably strong Momentum and Growth scores of 94.33 and 91.00 respectively, reflecting robust performance metrics despite stock price fluctuations.
On Thursday, Coinbase’s shares closed down 6.48%, settling at $240.65 in after-hours trading, representing a slight recovery of 0.57% from the regular session close. Robinhood’s shares also declined significantly by 7.79% during the day, later rebounding 1.47% after hours to finish at $111.97. These movements underscore investors' sensitive reaction to legislative delays regarding crypto regulation.
The ongoing pause in federal legislative action introduces substantial ambiguity for major crypto platform operators. How these regulatory developments unfold will be instrumental in shaping the companies' operational and expansion trajectories in the U.S. market.