Coinbase CEO Brian Armstrong abruptly pulled support for the Senate Banking Committee’s Digital Asset Market Clarity Act draft on Tuesday, delivering a major blow to the bill’s prospects. His announcement came via X after reviewing the proposed text over the past 48 hours, less than a day before a vital markup vote. Armstrong’s stance was clear: no bill is better than a bad bill.
In a stunning eleventh-hour move, Coinbase’s Armstrong torpedoes crypto legislation, declaring that regulatory void trumps harmful framework.
The decision marks a stunning reversal. Coinbase had been a key backer of crypto market structure legislation. Now they’re walking away. Why? For starters, the draft amendments would kill rewards on stablecoins—a death knell for Coinbase’s business model that generated $1.3 billion in revenue in 2025.
Banks are the culprits here. The banking lobby pushed for restrictions on stablecoin rewards to prevent customers from fleeing traditional banks. Heaven forbid people earn 3.5% on their money instead of the pittance banks offer.
But that’s not all. Armstrong cited major concerns about DeFi prohibitions and government overreach into financial records. The bill would effectively ban tokenized equities and trash user privacy rights. Not exactly a crypto-friendly approach. Experts recommend implementing robust internal controls to protect against such regulatory overreach while maintaining compliance in the evolving landscape.
Then there’s the regulatory power grab. The bill expands SEC authority while kneecapping the CFTC, making the latter fundamentally a puppet of the former. Armstrong didn’t mince words—the framework fails to treat crypto fairly compared to traditional finance.
Industry reactions were immediate. Michael Saylor retweeted Armstrong’s post in support, while Coinbase shares took a hit in after-hours trading. Analysts view this withdrawal as monumental for the bill’s future. Analysts are watching closely to see if a revised version might emerge.
The timing couldn’t be more dramatic. After being punted from December 2025 to early 2026, negotiations had seemingly reached a bipartisan phase. Now with over 130 amendments proposed, the bill’s future looks murky at best.
Armstrong remains optimistic that continued effort could produce a better draft. Critics have likened this legislation to an expansion of government financial surveillance, reminiscent of the 2001 USA Patriot Act. But for now, the crypto industry’s biggest player has spoken—and lawmakers are left scrambling.
