Coinbase backed a tougher CLARITY Act after Senate Democrats added safeguards for customers, even though its 2026 approval odds fell to 31% on Polymarket amid a dispute over ethics rules involving President Donald Trump.
Summary
- Coinbase backs revised CLARITY Act after Democrats secured stronger customer protections.
- White House resistance to crypto ethics rules threatens Senate vote before August.
- Polymarket traders estimate a 31% chance that the bill will become law in 2026.
Coinbase Vice President Ryan VanGrack told CNBC on Monday that Democrats won stronger consumer protections during closed-door negotiations over the final text of the bill in the Senate. He described the changes as giving the legislation “more teeth,” but did not provide details of the provisions or indicate whether lawmakers had resolved the separate ethics dispute.
“At the end of the day, it’s about customer protection,” VanGrack said.
“The status quo lacks that infrastructure, lacks those protections, and Democrats used that 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 U.S. framework for digital asset businesses and their clients. His comments also signal Coinbase’s support for negotiations after the exchange opposed an earlier Senate plan earlier this year.
CEO Brian Armstrong announced in January that Coinbase could not support the legislation as it was 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 who have called for the process to continue.
Lawmakers have not released the final Senate text or scheduled a floor vote Monday. Although VanGrack praised the consumer protection changes, he did not say whether the latest negotiations resulted in an ethics deal capable of winning enough Democratic votes.
Trump’s ethics conflict delays Senate deal
As crypto.news previously reported, Polymarket traders lowered the likelihood of the CLARITY Act becoming law in 2026 to 31%, while the White House refuses to support a contested ethics provision. The administration had not approved the proposed text as of July 20, according to sources cited in the report.
These 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 need more time to draft an updated version, which would jeopardize the Republican timetable for a vote before the August recess.
Senate Majority Leader John Thune wants the chamber to consider the bill before lawmakers leave Washington, but he acknowledged that Republicans have not reached a bipartisan agreement. Because the party cannot clear the Senate’s procedural hurdles alone, Thune would need Democrats’ support to advance the bill.
Democratic lawmakers have linked their support to restrictions targeting elected officials’ financial interests in digital assets. Their concerns center on Trump’s crypto businesses, 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 revenue tied to his memecoin, World Liberty Financial and other digital asset holdings. Democrats have cited such financial connections while pushing for ethics provisions to be inserted into market structure legislation, according to reports of the Senate negotiations.
Republican senators met with Trump on Thursday to discuss the bill, although the meeting did not result in a public position from the White House on the contested provision. Senate Democrats held their own closed-door meeting the day before to assess whether they could support the bill.
Coinbase support increases pressure for compromise
Trump 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 law “in honor” of the South Carolina Republican, whom Trump described as a strong supporter of the proposal.
Despite Trump’s public support for the bill, the White House’s reluctance to accept ethics language left negotiators without a deal needed to move the project forward. This disagreement pits the administration’s demand for rapid adoption against Democratic demands for rules covering public officials with crypto-related financial interests.
The latest support from Coinbase gives the bill industry endorsement from one of the largest US crypto exchanges. This also represents a change from Armstrong’s rejection of the previous version in January, although neither Coinbase nor VanGrack have publicly endorsed a specific ethics proposal.
Coinbase’s relationship with federal regulators has also changed since Trump returned to office. Under the Biden administration, the Securities and Exchange Commission sued the exchange for allegedly operating as an unregistered securities exchange, broker-dealer and clearing agency.
After Trump took office, the SEC, led by Acting Chairman Mark Uyeda, dropped the case. The agency’s withdrawal ended one of Coinbase’s largest regulatory disputes as Congress continued to work on legislation intended to outline oversight of digital asset markets.
For Senate negotiators, the unresolved question remains whether stronger customer protections can be paired with ethics restrictions that satisfy Democrats and receive approval from the White House. Until lawmakers release the revised text and gain sufficient bipartisan support, Thune’s desired vote before the August recess remains uncertain, while Polymarket traders continue to assess slim chances of passage this year.
