White House Upset With Coinbase's Unilateral Action, Considers Withdrawing Support for the CLARITY Act

Coinbase Global Inc. has withdrawn its support for the Senate version of the CLARITY Act, a crypto market structure bill, following the introduction of key amendments by lawmakers.

CEO Brian Armstrong cited issues such as a de facto ban on tokenized equities and expanded regulatory oversight of decentralized finance.

The move has caused a delay in the Senate Banking Committee's markup of the bill, originally scheduled for Thursday.

Why Did This Happen?

Armstrong stated that Coinbase reviewed the Senate Banking Committee's draft bill over the last 48 hours and found it unacceptable.

He argued that the bill creates significant risks for open crypto markets and restricts innovation in decentralized finance.

Coinbase's public withdrawal of support occurred without prior consultation with the White House or other stakeholders.

What Is the White House's Response?

According to sources close to the Trump administration, the White House is upset over the "unilateral" decision and may consider withdrawing its own support for the bill.

White House officials reportedly view Coinbase's move as a "rug pull" on the broader industry and the administration's interests.

Administration sources emphasized that the CLARITY Act is "President Trump's bill," not a product of a single company.

How Does This Affect the Bill's Prospects?

The bill seeks to establish a regulatory framework that divides oversight between the SEC and CFTC, clarifies stablecoin rules, and expands DeFi oversight.

Armstrong said the bill's changes give the SEC more authority at the expense of the CFTC and could create a regulatory imbalance.

The White House reportedly wants Coinbase to return to negotiations and propose a yield framework that satisfies both crypto companies and banks.

What Are the Broader Implications?

The CLARITY Act is a central piece of crypto legislation and has been backed by a broad coalition of lawmakers, regulators, and industry players.

Coinbase's decision highlights the growing influence of major crypto companies in Washington, but also the risks of concentrated decision-making.

The White House's potential withdrawal could further stall the bill and shift the focus to alternative legislative paths.

What's Next for the CLARITY Act?

Sen. Tim Scott, the chairman of the Senate Banking Committee, said that negotiations are ongoing and that all stakeholders remain at the table.

However, the delay has created uncertainty among market participants and raised questions about the timeline for finalizing the bill.

The Senate Agriculture Committee is also expected to play a role in the final version of the bill, as it holds jurisdiction over the CFTC.

If the bill is not passed soon, it may face further delays due to the upcoming midterm elections and shifting political dynamics in Congress.