The most ambitious attempt yet to write clear rules for U.S. digital assets is suddenly in limbo, after Coinbase chief executive Brian Armstrong pulled his backing at the last minute. A bill that was supposed to bring order to crypto markets is now a flashpoint for a broader fight over who controls the future of finance, with the Senate scrambling to salvage a package that had looked close to passage only days ago.
Armstrong’s reversal has turned a high-stakes markup into a test of political power between crypto platforms, Wall Street banks and regulators, and it has exposed deep unease over whether the current draft would protect consumers or entrench incumbents. The outcome will shape how everything from stablecoins to trading platforms are policed in the United States for years.
The Clarity Act stalls at the one-yard line
Lawmakers had positioned the Digital Asset Market Clarity Act, often shortened to the Clarity Act, as the long-awaited framework that would finally define how crypto markets fit into U.S. financial law. The Senate Banking Committee released an amended draft earlier this week, presenting it as a comprehensive digital asset bill that could move trading platforms, stablecoin issuers and token projects out of regulatory gray zones. The committee had scheduled a markup for Thursday, with members preparing amendments that would tweak, but not fundamentally rewrite, the structure.
That plan collapsed when the Senate Banking Committee abruptly canceled the session after Coinbase withdrew support, a decision that instantly turned a technical markup into a political crisis. The committee, which had been set to debate amendments to the Clarity Act on Thursday, scrapped the meeting once Armstrong’s objections surfaced, bringing those concerns “to the forefront” and forcing senators to rethink their path forward for the scheduled markup. What had looked like a near-finished product is now an open question.
Armstrong’s objections: consumer risk and bank power
Armstrong has framed his decision as a reluctant but necessary break with a bill he says changed too much in the latest rewrite. After reviewing the revised text, he announced that Coinbase could not support the legislation in its current form, citing “several unresolved issues” that he argued would harm both innovation and users. In his telling, the updated draft would tilt the playing field toward large financial institutions and give traditional banks broader control over crypto markets, a concern he laid out when he said Coinbase could not back the bill after a Senate rewrite.
In interviews, Armstrong has tried to cast the move as a defense of retail traders rather than a corporate power play. He told CNBC that Coinbase pulled support after finding provisions that could have harmed customers, arguing that some sections would have made it harder for ordinary users to access digital assets safely and transparently. He said his firm opposed the sweeping bill “to protect the consumer,” a line he used while explaining to CNBC why Coinbase was walking away from a process it had helped shape.
Big banks, “crypto bros,” and a bruising lobbying fight
Behind the policy language sits a raw contest over who gets to intermediate digital assets. Armstrong has accused large financial institutions of using the legislative process to “kill the competition,” telling FOX Business anchor Maria Bartiromo that big banks were trying to lock in advantages through the bill’s provisions. In that interview, he said “much of the industry” shared Coinbase’s concerns, portraying the draft as a vehicle for bank lobbyists to sideline upstart platforms and describing how he believed the text would benefit big banks at the expense of open crypto markets.
On Capitol Hill, that narrative has collided with a very different critique from skeptics who see the bill as too friendly to the digital asset industry. Senate Banking Committee Chair Tim Scott, a Republican from South Carolina, delayed the markup after Armstrong’s opposition, but progressive advocates warned that the chair should not simply rewrite the bill to match what “the crypto bros want.” In a pointed statement, critics argued that the delay showed how much sway industry executives still hold over the process, even as Tim Scott tried to balance competing demands from banks, exchanges and consumer groups.
Regulators warn of “next FTX” as Senate rethinks the draft
While industry players trade accusations, some former regulators are sounding alarms from a different angle. A former SEC Chief Accountant has warned that the current version of the Digital Asset Market Clarity Act could inadvertently set the stage for another major collapse like FTX, rather than preventing it. As the Senate Banking Committee convened to consider the bill, he argued that the framework might weaken existing disclosure standards and financial reporting obligations, raising the risk that opaque platforms could again hide losses and mislead investors, a concern he tied directly to the Digital Asset Market.
Those warnings complicate the narrative that the bill is simply a tug-of-war between banks and exchanges. If the framework is too permissive, it could lock in a lighter-touch regime that leaves consumers exposed to the same kind of accounting tricks and balance-sheet games that fueled earlier scandals. If it is too strict, it could push activity offshore or into unregulated corners of the internet. The Senate now has to thread that needle in public, with the Clarity Act’s fate hanging on whether lawmakers can reconcile Armstrong’s objections with the concerns of former SEC officials and investor advocates.
Markup delayed, but the bill is not dead yet
For now, the most concrete outcome of Coinbase’s move is delay. The Senate Banking Committee postponed its markup after Armstrong went public, with staff acknowledging that the opposition from such a prominent exchange made it difficult to proceed. One account described how the committee pushed back the session after Coinbase CEO Brian Armstrong expressed opposition, noting that the delay followed a review in which he concluded the bill would allow traditional banks to reduce their competition in crypto markets, a concern that directly shaped the committee’s decision to stand down.
Yet senators and staff insist the effort is not over. Reporting from inside the process suggests that the big crypto bill is not dead and could return as early as next month, with a renewed fight looming over how much power Wall Street banks should have in the new regime. Lawmakers are weighing whether to narrow the scope of the legislation, focus first on stablecoins and market structure, or press ahead with a comprehensive package that would still face a bruising battle between the digital assets crowd and entrenched financial interests in the Senate.
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