Coinbase shifts to backing stronger CLARITY Act as ethics fight over Trump stalls progress
Coinbase has signaled support for a beefed-up version of the CLARITY Act after Senate Democrats inserted tougher customer protections into closed-door negotiations — even as the bill’s path to passage is clouded by an unresolved ethics dispute tied to President Donald Trump.
What Coinbase said
Ryan VanGrack, Coinbase’s vice chair, told CNBC that the Democratic changes give the legislation “more teeth,” describing them as important fixes to gaps in the current U.S. framework for digital-asset businesses and their customers. “At the end of the day, this is about customer protections,” he said, noting the company’s shift from opposing an earlier draft at the start of the year.
Background: the company’s change of stance
In January CEO Brian Armstrong publicly opposed the initial Senate draft, a move that helped stall the bill’s early momentum. Since then, Coinbase executives — including Chief Legal Officer Paul Grewal — have urged lawmakers to continue negotiating a revised bill. VanGrack’s comments represent an industry endorsement from one of the largest U.S. crypto exchanges, though neither he nor Coinbase has endorsed any specific language on the ethics issue.
The sticking point: ethics language and the White House
Lawmakers have not released final Senate text or set a floor vote. The main roadblock is a contested ethics provision Democrats want that would limit elected officials’ financial interests in digital assets — a demand driven in part by scrutiny of Trump’s crypto ties, including Official Trump (TRUMP), World Liberty Financial and other holdings. In June, Trump disclosed roughly $1.4 billion in earnings tied to his memecoin and related digital-asset positions, a disclosure Democrats have cited in pushing for stricter rules.
The Biden administration (via the White House) has not approved the proposed ethics language, and sources told reporters the White House had not specified acceptable limits as of July 20. That lack of clarity is forcing negotiators to take more time to draft compromise language, putting Senate Majority Leader John Thune’s plan to move the bill before the August recess at risk. Because Republicans cannot clear Senate procedural hurdles alone, Thune needs some Democratic votes to advance the measure.
Political maneuvering and market signals
Republican senators met with Trump to discuss the bill, while Democrats held a separate closed-door meeting to assess whether the ethics language could win their support. Trump has urged the Senate to pass the CLARITY Act — even invoking the late Sen. Lindsey Graham in a public appeal — but the White House’s reluctance on the ethics provision has left negotiators without the needed agreement.
Markets have responded: Polymarket traders have lowered the probability of the CLARITY Act becoming law in 2026 to about 31%, reflecting expectations that the ethics dispute and lack of a White House sign-off could derail a quick vote.
Regulatory context for Coinbase
Coinbase’s endorsement comes against the backdrop of a major regulatory shift. The SEC sued Coinbase during the Biden administration alleging it operated as an unregistered securities exchange, broker and clearing agency; that case was dropped after Trump took office when the SEC, under acting Chair Mark Uyeda, withdrew the action — removing one of Coinbase’s most significant regulatory battles as Congress works on a market-structure bill.
What’s next
Negotiators must reconcile stronger consumer protections with ethics restrictions that satisfy Senate Democrats and win White House approval. Until a revised text is published and bipartisan support is secured, a vote before the August recess looks uncertain and traders will likely continue pricing a low chance of enactment this year.
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