White House is angry over Coinbase’s surprise withdrawal

The White House is threatening to withdraw its backing for the Senate Committee’s crypto market structure bill, meant to go on vote last Thursday. Now, they are advocating for Coinbase to get back on board with lawmakers after the exchange’s CEO said it “can’t support the way the law is written.”

According to a source close to the administration, the White House is prepared to walk away from the legislation if Coinbase does not return to negotiations and agree to a yield framework that satisfies banking interests and brings all parties back to consensus. 

On Wednesday through Thursday, senior administration officials, lawmakers, and industry figures were prepared to vote on the nearly 300-page Clarity Act. Coinbase’s word that it would not be part of its supporters forced the committee to postpone the vote and hold more discussions, much to the disappointment of the Oval Office. 

White House is angry over Coinbase’s surprise withdrawal 

Speaking to Crypto In America journalist Eleanor Terrett, the source said Coinbase made a “unilateral” move that blindsided the White House and other stakeholders.

The White House has privately called Coinbase’s action a “rug pull” against the administration and the crypto industry, according to the source. Washington has blasted the crypto exchange for trying to “dictate the fate of industry-wide legislation,” reiterating that the bill was negotiated by a coalition of lawmakers, regulators, and market participants.

“This is President Trump’s bill at the end of the day, not Brian Armstrong’s,” the source said.

President Trump has been very supportive of digital asset innovation since his return to the US top seat, and his administration backed the House version of the Clarity Act earlier this year. But the POTUS’s camp is now willing to let the bill fail rather than accept “pressure from a single company.”

Coinbase chief executive Brian Armstrong defended his company’s decision in a CNBC interview on Thursday, saying the firm had identified provisions that would harm consumers.

“The high-level principle is that you can’t really have banks come in and try to kill their competition at the expense of the American consumer,” he told the news outlet.

Armstrong had first publicized Coinbase’s opposition in a post on X late Wednesday, writing: “Coinbase unfortunately can’t support the bill as written. This version would be materially worse than the current status quo. We’d rather have no bill than a bad bill.”

As Cryptopolitan reported on Friday, he explained that traditional savings accounts pay about 14 basis points on average, and stablecoin rewards that can reach 3.8%, which is an opportunity for banks to innovate with no risks to their business models.

Months of discussions halted by one company

Congressional staff had reportedly worked with industry representatives for months to craft the Clarity Act, meant to define regulatory boundaries for trading, custody, issuance, and decentralized finance. 

Coinbase, now publicly traded on Nasdaq with a market value near $70 billion, helped finance a network of political action committees that spent more than $130 million during the 2024 election cycle to back crypto-friendly candidates. Some netizens think the support may have gotten the company its loud influence on crypto-related bills.

“Coinbase alone does not speak for the crypto industry and should not have a stranglehold on legislation. I also do not believe that the yield on stablecoins should be the deciding factor. This bill, at its core, has nothing to do with yield on stablecoins,” said one proponent of the market structure bill on X.

When asked whether talks had resumed after the surprise withdrawal, Kara Calvert, Coinbase’s head of US policy, said the pause was a “shock to the system.”

“We want to be respectful of the fact that blood, sweat, and tears have gone into this bill. I can’t stress enough how impressive it has been for the Senate staff and the Senators themselves who met for hundreds of hours at the member level to discuss these details…We want to make sure we are at the table working through this details, that we are going to get this done, and I don’t think anyone is walking away, Democrat, Republican, and I think even the industry is still absolutely united,” she said in an interview with Crypto In America.

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