Coinbase CEO Brian Armstrong said late Tuesday that the company can no longer support the US Senate’s version of the crypto market structure bill after lawmakers introduced sweeping changes to the CLARITY Act.

He said the Senate Banking Committee’s draft “breaks key parts of market structure” and creates risks for tokenized equities, DeFi, stablecoins, and open crypto markets.

Coinbase withdrew its backing just hours before the Senate was due to move the bill toward committee markup.

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

At the same time, Capitol Hill sources are circulating unconfirmed reports that the markup scheduled for tomorrow could be pulled following Coinbase’s move. 

The reports remain rumors, but they highlight the growing political risk around the bill.

Armstrong outlined four main concerns in his statement. The de facto ban on tokenized equities means that blockchain-based stocks and financial instruments cannot trade freely on crypto infrastructure.

The Coinbase CEO 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. This could potentially bring Gensler-era problems back to the industry. 

🚨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…

Finally, he said the draft contains stablecoin and banking provisions that allow banks to restrict competition and limit crypto-native rewards.

The Senate Banking Committee is not voting on the House-passed CLARITY Act. Instead, it is using a full rewrite known as an “amendment in the nature of a substitute.”

That 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 active 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 Senate was expected to begin committee markup this week. That is when lawmakers formally debate and vote on amendments.

However, following 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 fight over who controls crypto, stablecoins, and DeFi in the United States has clearly entered its most fragile stage yet.

The post Coinbase Pulls Support for CLARITY Act After Senate Rewrite appeared first on BeInCrypto.

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