Coinbase has backed a tougher CLARITY Act after Senate Democrats added customer safeguards, even as its 2026 approval odds have fallen to 31% on Polymarket amid a dispute over ethics rules involving President Donald Trump.
Summary
- Coinbase backs the revised CLARITY Act after Democrats secured stronger customer protections.
- White House resistance to crypto ethics rules threatens a Senate vote before August.
- Polymarket traders place the bill’s chance of becoming law in 2026 at 31%.
Coinbase vice chair Ryan VanGrack told CNBC on Monday that Democrats had secured stronger consumer protections during closed-door negotiations over the bill’s final Senate text. He described those changes as giving the legislation “more teeth,” though he did not provide details about the provisions or indicate whether lawmakers had settled the separate ethics dispute.
“At the end of the day, this is about customer protections,” VanGrack said.
“The status quo lacks this infrastructure, lacks these protections, and the Democrats used this opportunity, wisely, to make sure that customers were first and foremost in [this bill].”
According to VanGrack, the additional safeguards address gaps in the current US framework for digital asset businesses and their customers. His comments also signal Coinbase’s support for the negotiations after the exchange opposed an earlier Senate draft at the start of the year.
CEO Brian Armstrong announced in January that Coinbase could not support the legislation as then written, a decision that may have contributed to a delay in the Senate Banking Committee’s markup. Since then, Coinbase executives have publicly supported efforts to pass a revised bill, with chief legal officer Paul Grewal among those calling for the process to continue.
Lawmakers have not released the final Senate text or scheduled a floor vote as of Monday. Although VanGrack praised the consumer protection changes, he did not say whether the latest negotiations had produced an ethics agreement capable of winning enough Democratic votes.
Trump ethics dispute holds up a Senate agreement
As crypto.news previously reported, Polymarket traders have lowered the CLARITY Act’s probability of becoming law in 2026 to 31% while the White House withholds support for a disputed ethics provision. The administration had not approved the proposed language as of July 20, according to sources cited in the report.
Those sources also said the White House had not told Senate negotiators what limits it would accept. Without a clear position from the administration, the report said lawmakers may require more time to draft an updated version, putting the Republican timetable for a vote before the August recess at risk.
Senate Majority Leader John Thune wants the chamber to consider the bill before lawmakers leave Washington, but he has acknowledged that Republicans have not reached a bipartisan agreement. Because the party cannot clear the Senate’s procedural barriers alone, Thune would need support from Democrats to advance the legislation.
Democratic lawmakers have tied their support to restrictions addressing elected officials’ financial interests in digital assets. Their concerns center on Trump’s crypto activities, including Official Trump (TRUMP), World Liberty Financial and other investments linked to the president and his family.
In June, Trump disclosed $1.4 billion in earnings tied to his memecoin, World Liberty Financial and other digital asset holdings. Democrats have cited such financial connections while pressing for ethics language in the market structure legislation, according to reports on the Senate negotiations.
Republican senators met Trump on Thursday to discuss the bill, though the meeting did not produce a public White House position on the contested provision. Senate Democrats held their own closed-door meeting a day earlier to assess whether they could support the legislation.
Coinbase support raises pressure for a compromise
Trump has urged the Senate to approve the CLARITY Act and used the death of Senator Lindsey Graham to renew that call. In a social media post last week, the president asked senators to pass the legislation “in honor of” the South Carolina Republican, whom Trump described as a strong supporter of the proposal.
Despite Trump’s public endorsement of the bill, the White House’s reluctance to accept the ethics language has left negotiators without an agreement needed to move it forward. The disagreement places the administration’s request for swift passage against Democratic demands for rules covering officials with crypto-linked financial interests.
The latest support from Coinbase gives the bill an industry endorsement from one of the largest US crypto exchanges. It also represents a change from Armstrong’s January rejection of the previous version, although neither Coinbase nor VanGrack has publicly endorsed a specific ethics proposal.
Coinbase’s relationship with federal regulators has also changed since Trump returned to office. During the Biden administration, the Securities and Exchange Commission sued the exchange for allegedly operating as an unregistered securities exchange, broker and clearing agency.
After Trump took office, the SEC under acting Chair Mark Uyeda dropped the case. The agency’s withdrawal removed one of Coinbase’s largest regulatory disputes as Congress continued working on legislation intended to define oversight of digital asset markets.
For Senate negotiators, the unresolved issue remains whether stronger customer protections can be paired with ethics restrictions that satisfy Democrats and receive White House approval. Until lawmakers publish the revised text and secure enough bipartisan support, Thune’s desired vote before the August recess remains uncertain, while Polymarket traders continue to price in a low chance of enactment this year.
Credit: Source link
