Coinbase has endorsed a more stringent version of the CLARITY Act following the inclusion of enhanced customer protections by Senate Democrats. However, the bill’s chances of passing in 2026 have fallen to 31% on Polymarket, primarily due to ongoing controversies surrounding ethics rules related to former President Donald Trump.
Summary
- Coinbase backs the revised CLARITY Act, which now includes stronger customer protection measures secured by Democrats.
- Pushback from the White House regarding crypto ethics rules jeopardizes a Senate vote prior to August.
- Traders on Polymarket currently project a 31% chance of the bill being enacted in 2026.
On Monday, Coinbase vice chair Ryan VanGrack informed CNBC that Democrats have successfully achieved enhanced consumer protections in the bill’s final Senate version. He described these modifications as giving the legislation “more teeth,” although he refrained from detailing specific provisions or confirming whether the ethics dispute had been settled.
“Ultimately, this revolves around customer protections,” VanGrack stated.
“The current system lacks this type of framework and safeguards, and Democrats wisely seized this opportunity to prioritize customer interests in [this bill].”
VanGrack highlighted that the new protections address shortcomings in the existing US regulatory framework for digital asset businesses and their clients. His remarks suggest that Coinbase is now supporting the negotiations after previously opposing an earlier Senate draft earlier this year.
In January, CEO Brian Armstrong announced that Coinbase could not back the bill in its prior draft. This decision potentially contributed to delays in the Senate Banking Committee’s markup. Since then, Coinbase leaders, including chief legal officer Paul Grewal, have publicly championed a revised bill.
As of Monday, congressional leaders had not released the final Senate text or scheduled a vote on the floor. While VanGrack praised the consumer protection changes, he did not specify whether the most recent negotiations had reached a consensus on the ethics issue that would secure sufficient Democratic votes.
Trump ethics dispute hampers Senate unity
As reported by crypto.news, Polymarket traders have assessed the chance of the CLARITY Act being enacted in 2026 at 31%, largely due to the White House’s reluctance to support a controversial ethics provision. Sources indicated that the proposed language had not received approval as of July 20.
These insiders also mentioned that the White House had yet to signal what limitations it might accept. Without a clear stance from the administration, lawmakers may require additional time to draft an updated version, putting Republicans’ plans for a vote before the August recess at risk.
Senate Majority Leader John Thune aims to advance the bill before lawmakers leave Washington, but he has recognized that Republicans have not reached bipartisan consensus. Since the party cannot navigate Senate procedural hurdles alone, Thune needs Democratic votes to move the legislation forward.
Democratic lawmakers have conditioned their support on stipulations regarding elected officials’ financial interests in digital assets. Their scrutiny centers on Trump’s cryptocurrency transactions, including Official Trump (TRUMP), World Liberty Financial, and other investments associated with the former president and his family.
In June, Trump disclosed $1.4 billion in earnings from his memecoin, World Liberty Financial, alongside other digital asset holdings. Democrats have pointed to these financial connections while advocating for ethics language in the market structure legislation, according to reports on Senate negotiations.
Republican senators met with Trump on Thursday to discuss the bill; however, the meeting did not result in a public stance from the White House concerning the contentious provision. Senate Democrats held their own closed-door meeting the day prior to assess their support for the legislation.
Coinbase’s backing intensifies push for a resolution
Trump has urged the Senate to pass the CLARITY Act, citing the late Senator Lindsey Graham to bolster his call. In a social media post last week, the former president appealed to senators to enact the legislation “in honor of” the South Carolina Republican, whom Trump characterized as a staunch supporter of the proposal.
Despite Trump’s vocal support for the bill, the White House’s reluctance to accept the ethics provisions has left negotiators without the vital consensus needed to proceed. This discord contrasts with the administration’s push for expedited passage against Democratic demands for regulations concerning officials financially linked to cryptocurrencies.
Recent endorsement from Coinbase adds significant industry support to the bill from one of the largest crypto exchanges in the U.S. This represents a notable shift from Armstrong’s initial rejection of the earlier version in January; however, neither Coinbase nor VanGrack has explicitly endorsed any specific ethics proposal.
Coinbase’s relationship with federal regulators has also seen evolution since Trump’s return to office. During the Biden administration, the Securities and Exchange Commission (SEC) initiated a lawsuit against the exchange for allegedly operating as an unregistered securities exchange, broker, and clearing agency.
Once Trump assumed the presidency, the SEC, under acting Chair Mark Uyeda, dropped the case. This withdrawal alleviated one of Coinbase’s major regulatory challenges as Congress continued working on legislation aimed at clarifying oversight of digital asset markets.
For Senate negotiators, the key task remains aligning stronger customer protections with ethical restrictions that satisfy both Democrats and gain White House approval. Until lawmakers finalize the updated text and achieve sufficient bipartisan support, Thune’s goal for a vote before the August recess appears uncertain, with Polymarket traders continuing to project a slim chance of enactment this year.
