The global crypto community is witnessing a sharp internal clash as Cardano founder Charles Hoskinson publicly criticized Ripple CEO Brad Garlinghouse for backing the controversial CLARITY Act. The disagreement has triggered intense debate across the industry, exposing deep fractures over how crypto regulation should move forward under the Trump administration.
During a livestream on X dated January 18, Hoskinson addressed a wide range of topics, including privacy upgrades for Cardano’s Midnight protocol. However, the core of his message centered on what he sees as the crypto industry’s growing willingness to accept weak regulatory deals. His strongest words were aimed at Garlinghouse, who has encouraged the community to support the Crypto Asset Market Structure and Investor Protection Bill, commonly called the CLARITY Act, despite its flaws.
Hoskinson believes this mindset represents surrender, not progress.
Hoskinson Calls Out Industry “Learned Helplessness”
For most of his livestream, Hoskinson focused on what he described as a culture of pessimism inside crypto. According to him, the industry has developed a mentality where it expects to lose and therefore settles for bad deals.
He labeled this mindset as “learned helplessness,” saying many leaders now assume that harsh regulation is inevitable and should simply be accepted. Hoskinson linked this attitude directly to years of pressure from regulators, especially under the previous administration’s aggressive stance toward crypto.
While he acknowledged that the last administration created serious damage, he rejected the idea that the current environment represents real improvement.
In his view, the industry is celebrating small relief while ignoring deeper problems.
Why Hoskinson Rejects the CLARITY Act
Hoskinson singled out the CLARITY Act as proof that nothing fundamental has changed. He argued that the bill still hands excessive authority to the Securities and Exchange Commission.
Under the proposed framework, the SEC would have the power to decide which crypto assets qualify as securities. Even more troubling for Hoskinson is that the bill reportedly treats every token as a security by default until proven otherwise.
To him, this is no different from the era under former SEC Chair Gary Gensler.
Hoskinson pointed out that the industry has spent millions on lobbying and political donations, yet ended up with legislation that still places crypto under heavy regulatory control. In his words, all that effort has led right back to the same problem.
He made it clear that he does not consider this a win.
Hoskinson Targets Ripple CEO Brad Garlinghouse
While criticizing the entire industry, Hoskinson reserved special criticism for Ripple CEO Brad Garlinghouse. Garlinghouse has argued that the CLARITY Act, even with its flaws, is better than having no clear rules at all.
He believes that once the bill is passed, its weak points can be fixed later through amendments.
Hoskinson strongly rejected that logic.
He said supporting the bill in its current form is not compromise but surrender. In his view, giving the SEC sweeping power today will make it nearly impossible to roll back tomorrow.
To support his argument, Hoskinson referenced the Securities Exchange Act of 1933, which remains largely unchanged after more than nine decades. His message was simple: bad laws tend to stay bad for a very long time.
Call to Reject the CLARITY Act
Hoskinson urged the crypto community to reject the CLARITY Act in its current version. He challenged industry leaders to stop thinking in terms of survival and start thinking in terms of building fair rules.
Rather than accepting what is on the table, he argued the industry should be willing to endure uncertainty while fighting for better legislation.
He openly criticized those who support the bill simply because they fear worse alternatives. To Hoskinson, fear based decision making is what allowed bad regulation to take root in the first place.
His stance has energized many crypto advocates who believe the industry deserves stronger protections and clearer definitions that do not automatically treat every token as a security.
Crypto Industry Split Over the Bill
Hoskinson is not alone in opposing the CLARITY Act, but he is among its loudest critics. Coinbase CEO Brian Armstrong has also withdrawn support for the bill in its current form, signaling growing concern among major players.
However, not everyone agrees.
Ripple and Kraken continue to back the legislation, even while admitting it is flawed. Their position is based on the idea that having some structure is better than none, and that changes can be made later.
This divide has created tension across the industry. Some see the bill as a necessary first step. Others see it as a dangerous trap.
The debate is no longer just about policy. It is about the future identity of crypto itself.
Midnight Protocol and Privacy Concerns
Hoskinson’s livestream also included discussion about Cardano’s Midnight protocol, which is focused on privacy enhancements. He connected the privacy debate directly to regulation.
In his view, strong privacy tools will always face resistance from regulators. That is why he believes it is critical for the industry to fight for fair laws now, rather than accept frameworks that make innovation harder.
He warned that once strict control is normalized, privacy focused technologies could be pushed to the margins or heavily restricted.
For Hoskinson, the CLARITY Act represents a future where innovation must constantly ask permission.
Political Pressure and White House Threats
Reports suggest that the White House has warned it could withdraw support for crypto friendly efforts if the industry does not align more closely with government priorities. This adds another layer of pressure on lawmakers debating the CLARITY Act.
The fate of the bill remains uncertain, but what is clear is that the crypto sector is no longer united in its strategy.
Some leaders believe cooperation is the only way forward. Others, like Hoskinson, believe resistance is necessary to avoid long term damage.
What This Means for Crypto’s Future
The clash between Hoskinson and Garlinghouse is more than a personal disagreement. It reflects two very different visions for crypto.
One vision focuses on working within the system, even if that system is flawed. The other vision is willing to risk short term chaos in order to fight for better long term rules.
Hoskinson’s message is that accepting weak laws today will shape the industry for decades. He believes crypto was built to challenge old systems, not quietly submit to them.
Supporters of the CLARITY Act argue that without rules, crypto will remain under constant threat from enforcement actions and uncertainty.
This debate is likely to intensify as the bill moves through the Senate.
Final Thoughts
Charles Hoskinson’s attack on Ripple CEO Brad Garlinghouse has ignited one of the most important debates in crypto today. At its heart is a simple question: should crypto accept imperfect regulation for stability, or reject it in pursuit of something better?
