Tensions have escalated in Washington as White House officials have signaled they may withdraw administration backing for a major crypto market structure bill following Coinbase’s abrupt rejection of the legislation. The threat comes in direct response to CEO Brian Armstrong’s public criticism of provisions seen as harmful to privacy, DeFi innovation, and competitive balance in the digital asset space.
Sources close to the administration indicate frustration with Coinbase’s last-minute withdrawal of support, which disrupted momentum just ahead of a Senate Banking Committee markup. The bill, intended to provide long-sought regulatory clarity by defining token classification and allocating oversight between the SEC and CFTC, had enjoyed broad industry and bipartisan endorsement until Coinbase highlighted “fatal flaws” including potential DeFi prohibitions and erosion of privacy rights. White House aides reportedly view the move as undermining months of careful negotiation, with one official quoted anonymously stating that continued opposition from a key stakeholder could jeopardize full executive endorsement.
The rift underscores deeper divides within the crypto community: while some exchanges and trade groups favor any clarity over the status quo, others—including Coinbase—insist on stronger safeguards against overreach. Armstrong’s detailed objections, outlined in his widely shared X statement, emphasized that certain amendments would grant excessive government access to financial data and stifle tokenized assets.
As Armstrong posted on X: “Coinbase unfortunately can’t support the bill as written. There are too many issues, including DeFi prohibitions, giving the government unlimited access to your financial records and removing your right to privacy.”
The potential loss of White House support could stall progress significantly, especially as competing House versions advance and election-year politics intensify scrutiny on digital asset policy.
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As Congress weighs next steps, the Coinbase-White House clash highlights the delicate balance required for meaningful reform—one that satisfies innovators, institutions, and regulators without alienating core industry players.
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