Gnosis Co-Founder Warns Clarity Act Favors Big Finance

A new debate is growing around the Digital Asset Market Structure CLARITY Act. It’s a proposed law that aims to regulate the crypto industry in the United States. While the bill tries to bring clear rules to digital assets. Some experts believe it could also change how the crypto ecosystem works.

One of those critics is Dr. Friederike Ernst, co-founder of the Gnosis blockchain protocol. In a recent interview with CoinTelegraph, Ernst said the bill could shift control of crypto toward large financial institutions. She warned that the structure of the bill may push more crypto activity. Through banks and other big financial players. If that happens, the open and decentralized nature of blockchain networks could slowly weaken.

The CLARITY Act Tries to Define Crypto Rules

The CLARITY Act was introduced in 2025. Its main goal is to create clearer rules for digital assets. For years, crypto companies in the U.S. have faced confusion about regulation. Many projects are unsure whether their tokens should be treated as securities or commodities.

The proposed law tries to solve that problem. It would divide oversight between two regulators. The SEC would oversee tokens that qualify as securities. Meanwhile, the CFTC would regulate tokens. That functions more like a commodity. Supporters say this approach could remove uncertainty. This will help the crypto market grow under clear legal guidelines.

Critics Say the Bill May Favor Large Institutions

Despite these goals, Dr. Friederike Ernst believes the bill could have unintended effects. She explained that the proposal assumes most crypto activity should pass through intermediaries. Such as exchanges, financial companies or other regulated institutions. If that structure becomes the norm, large financial firms could gain much more influence over the industry.

Gnosis co-founder warned that power could become concentrated in the hands of only a few big players. This would look very similar to the traditional financial system. For many people in the crypto community, that idea goes against the original purpose of blockchain technology.

Blockchain Was Built Around User Ownership

Dr. Friederike Ernst also highlighted what she believes is the true breakthrough of blockchain networks. In many crypto systems, users are not just customers. They can also become owners and participants in the network. People can hold tokens, vote on governance decisions and help support the ecosystem. 

This structure allows communities to shape how a network grows. But Gnosis co-founder said forcing activity through financial institutions could slowly change that model. Instead of acting as stakeholders, users may end up behaving more like regular customers again.

The Debate Over Crypto’s Future

The discussion around the CLARITY Act shows a larger debate inside the crypto industry. Some experts believe stronger regulation is necessary for long term growth. Clear rules could encourage institutional investment and improve market stability. Others worry that too much regulation could undermine the principles. 

That made crypto unique in the first place. For now, lawmakers continue to discuss the bill as the industry watches closely. Whether the CLARITY Act strengthens the crypto ecosystem or reshapes it toward traditional finance remains an open question.

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