Coinbase Drops CLARITY Act as Senate Rewrite Wobbles the Market

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In a universe where spreadsheets glow like embers and regulators polish their wands with coffee, Coinbase CEO Brian Armstrong announced on Tuesday night that they can no longer back the Senate’s version of the crypto market structure bill after lawmakers wandered off into a forest of sweeping changes to the CLARITY Act.

He warned the Senate Banking Committee’s draft “breaks key parts of market structure” and could unleash risks for tokenized equities, DeFi, stablecoins, and open crypto markets-like handing a dragon a key to the candy vault. 🍬🐉

The Clarity Act Has Taken a Turn

Coinbase withdrew its support just hours before the Senate was due to push the bill toward committee markup, as if the committee chairs suddenly discovered a new hobby: dramatic cliffhangers and perhaps a few more form letters.

After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can’t support the bill as written.

There are too many issues, including:

– A de facto ban on tokenized equities
– DeFi prohibitions, giving the government unlimited access to your financial…

– Brian Armstrong (@brian_armstrong) January 14, 2026

Capitol Hill whispers suggest the markup scheduled for tomorrow could be pulled following Coinbase’s move. Rumors flutter around like squirrels in a data center, but they highlight the growing political risk around the bill. 🐿️💾

Armstrong outlined four main concerns. The de facto ban on tokenized equities means blockchain-based stocks and financial instruments can’t trade freely on crypto infrastructure. The CEO also thinks the bill expands government access to DeFi transaction data by pushing decentralized protocols into Bank Secrecy Act and anti-money-laundering regimes. 🧭

Notably, the latest changes give the SEC broader control over crypto markets, which could bring back Gensler-era headaches-only louder and with more charts. 📈😬

🚨NEW: It probably speaks to the size and influence of @coinbase on Capitol Hill that I’m hearing rumblings the markup could be pulled tomorrow after CEO @brian_armstrong announced he was withdrawing the company’s support for the bill an hour ago. TO BE CLEAR: I have not…

– Eleanor Terrett (@EleanorTerrett) January 14, 2026

Finally, Armstrong noted that the draft contains stablecoin and banking provisions that allow banks to restrict competition and limit crypto-native rewards. Because nothing says “friendly” quite like a bank adding a few new rules to your lunch menu. 🥪🏦

What Changed in the Senate Rewrite

The Senate Banking Committee isn’t voting on the House-passed CLARITY Act. Instead, it is using a full rewrite known as an “amendment in the nature of a substitute.”-a phrase that sounds suspiciously like bureaucratic cosplay.

This draft makes several major changes to how US crypto markets would be regulated.

Here is a simple side-by-side of what changed.

Coinbase is the largest regulated crypto exchange in the United States and one of the industry’s most vocal policy voices in Washington. Its public withdrawal signals to lawmakers that the bill may no longer have industry support at a critical moment. 🔔

That matters because the Senate Banking and Senate Agriculture committees need bipartisan backing to move the bill forward. The plot thickens like custard left too long in a wizard’s cauldron. 🧙‍♂️🍮

What Happens Next for the CLARITY Act?

The Senate was expected to begin committee markup this week-where lawmakers formally debate and vote on amendments. But after Coinbase’s statement, some policy insiders now say leadership may delay or pull the markup to avoid a public collapse of support. 🗳️

For now, the bill remains in flux. But the battle over who controls crypto, stablecoins, and DeFi in the United States has clearly entered its most fragile stage yet-like a dragon wearing a fragile glass hat and trying not to sneeze. 🐉💥

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2026-01-15 02:47