Coinbase has shifted its stance on legislation shaping the U.S. crypto market structure. Company executives stated that, following Democratic efforts to strengthen customer protection provisions, the exchange now supports the Senate version of the CLARITY Act. However, ethical provisions related to Trump and his family’s crypto interests remain unresolved, leaving the bill’s prospects for a vote before the August recess uncertain.
Coinbase reverses position to support revised text
On July 20, Coinbase Vice Chairman Ryan VanGrack told CNBC that Democrats secured stronger consumer protections in closed-door negotiations, making the bill “stronger.” He did not disclose specific provisions or indicate whether the Senate had reached agreement on another, more contentious ethics provision.
VanGrack stated that the current regulatory framework for digital asset businesses in the United States still has gaps, and the new protective measures aim to fill these gaps and place customer interests at a higher priority. This statement indicates that Coinbase now supports the current direction of negotiations, whereas the company previously opposed early Senate drafts earlier this year.
In January, Coinbase CEO Brian Armstrong publicly stated that, at the time, the company could not support the bill. Since then, Coinbase’s leadership has gradually shifted to support revisions, with Chief Legal Officer Paul Grewal also publicly calling for continued progress on the legislative process.
Ethical provisions continue to stall Senate proceedings.
As of July 20, the Senate has not yet released the final text or scheduled a full chamber vote. The primary obstacle remains the ethics provisions. Democratic lawmakers are demanding restrictions in the bill to address financial interests of elected officials in the digital assets sector, with particular controversy centered on Trump-related crypto projects.
The report mentions that Democratic concerns involve Official Trump (TRUMP), World Liberty Financial, and other digital asset investments related to Trump himself and his family. In June, Trump disclosed that his combined gains from his memecoin, World Liberty Financial, and other digital asset holdings amounted to approximately $1.4 billion.
Sources say the White House had not approved the proposed wording of the contentious provisions as of July 20, nor had it clarified acceptable limits to Senate negotiators. Due to the administration’s unclear stance, lawmakers may need more time to revise the text, putting pressure on the Republican timeline to push for a vote before the August recess.
The vote counts from both parties are under pressure from market expectations.
Senate Majority Leader John Thune hopes to have the bill considered before lawmakers leave Washington, but he also acknowledged that Republicans have not yet reached a bipartisan agreement with Democrats. Since Republicans cannot alone overcome the Senate’s procedural hurdles, passage of the bill still requires Democratic support.
Last week, Republican senators met with Trump to discuss the bill, but the White House did not publicly clarify its position on the ethics provisions following the meeting. Democratic senators also held a closed-door meeting the day before to assess whether to support the bill.
Trading data on Polymarket shows that market expectations for the bill becoming law by 2026 have dropped to 31%. With the final text yet to be released and bipartisan disagreements still unresolved, the bill’s short-term prospects for meaningful progress depend on whether consumer protection provisions and ethical limits can both be incorporated into an acceptable framework.
The regulatory environment has changed since then.
The federal regulatory environment in which Coinbase operates has also changed. During the Biden administration, the U.S. Securities and Exchange Commission sued Coinbase, alleging that it operated as an unregistered exchange, broker, and clearing agency. Since Trump’s return to office, the SEC under acting chair Mark Uyeda has withdrawn the case.
This change resolves a major regulatory dispute facing Coinbase and further intensifies the backdrop for Congress to advance legislation on the regulatory division of digital assets.