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- Zafar Naik
Zafar Naik
- Reviewed by:
Qadir AKQadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.
- Jan 24, 2026 09:08 UTC
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CLARITY Act Slammed! Aaron Day Says Coinbase, Banks Win While DeFi Dies
A growing backlash is emerging as critics warn the CLARITY Act could reshape crypto through expanded surveillance.
Aaron Day claims the real winners of new U.S. crypto bills may be banks and major exchanges.
Questions are mounting over how much control future crypto rules could give regulators.
Aaron Day, Chairman and CEO of the Daylight Freedom Foundation, slammed the CLARITY Act and Senate crypto bills as “worse than the Patriot Act in terms of surveillance” during a recent interview on the Paul Barron Network.
Day argued that no crypto legislation is needed. Self-custody has worked for 16 years without Congress stepping in. The real fight, he said, is not crypto versus banks. It is large exchanges like Coinbase lobbying for rules that block smaller competitors.
What the Bills Actually Include
The proposed legislation packs in real-time trade surveillance, five-year transaction record retention, data sharing with foreign governments, and emergency freeze powers over user funds.
Day flagged something most crypto holders missed. Treasury already dropped the cash reporting threshold from $10,000 to $200 in 30 zip codes across California and Texas. This happened through a memo, not a vote.
The original $10,000 limit was set in 1970. Adjusted for inflation, that would be $80,000 today.
Follow the Money
Day named the real winners if these bills pass: banks, traditional custodians, Coinbase, and Circle. Not DeFi, small projects, and not retail investors.
“Nobody’s paying me to oppose these bills. There’s no money in it,” he said. “So you have a massive machine with media, crypto media that’s aligned with wanting the outcome of this because they directly benefit.”
Crypto companies spent over $20 million on lobbying. Banks spent $50-70 million.
History Repeats
Day warned that protective limits in legislation never stay limited. Income tax started at 1% in 1913. Within five years, it hit 77%. The Patriot Act was sold as a tool against foreign terrorists in 2001. By 2003, it was being used in domestic drug cases.
“I want somebody to demonstrate to me a bill that started out with protective provisions where there wasn’t scope creep,” he added.
DeFi and Self-Custody Under Threat
Day predicted that if these bills pass, Coinbase could eventually get bought out by JPMorgan Chase or BlackRock. He expects DeFi to be killed either immediately or through future rule changes once the framework is in place.
The Senate Agriculture Committee is set to release its own draft crypto bill next week, which could widen the divide further.
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FAQs
Critics say the bill expands surveillance and control over crypto activity, raising new concerns about privacy and user autonomy.
Users could face more transaction monitoring, longer data retention, and broader powers for authorities to freeze funds.
Opponents believe major banks, custodians, and large exchanges would benefit, while smaller crypto firms and DeFi face higher barriers.
Critics warn the framework could tighten over time, potentially restricting decentralized tools even if early rules appear limited.
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