Coinbase chief executive Brian Armstrong has accused the Wall Street Journal of preparing a report that will hold him responsible for the CLARITY Act failing in the Senate.
Before the reported article was published, Armstrong posted his defence on X. He accused the Journal of “regurgitating bank lobby talking points” and said the newspaper “takes direction from bank lobbyists instead of reporting the truth.”
The Wall Street Journal had not published the story by Saturday, meaning its argument remains unknown. Armstrong set out what he described as “the boring TLDR” of events that could form the basis of the report.
The dispute dates back to 14 January, when Armstrong said Coinbase could not support the bill in its then-current form on the eve of a planned Senate Banking Committee markup.
“No bill is better than a bad bill,” he wrote.
The committee postponed the session almost immediately, and the markup was not held again for several months.
Armstrong said his concerns related to provisions covering decentralised finance (DeFi), tokenised securities, the authority of the Commodity Futures Trading Commission (CFTC) and rewards on stablecoins.
Stablecoin rewards had been particularly contentious, with banks arguing that interest-like payments could draw deposits away from the banking system.
According to Armstrong, the delay eventually produced a compromise. The industry rallied around an agreement on yield in early May, and the Senate Banking Committee passed the bill by 15 votes to nine on 14 May. Democratic senators Angela Alsobrooks and Ruben Gallego voted in favour.
“The final draft of CLARITY that went to the Senate was great, and I strongly supported it,” Armstrong said.
Coinbase campaigned strongly for the legislation during the summer, and Armstrong predicted that greater clarity for cryptocurrency would emerge regardless of the result days before the Senate floor vote.
The bill failed to advance when a cloture vote on 15 September fell short of the 60 votes required. The sponsors had made 126 concessions, including a Treasury “circuit breaker” intended to prevent stablecoin rewards from draining deposits from community banks.
Alsobrooks and Gallego, despite supporting the bill in committee, both voted against cloture.
The defeat was followed by a $450m outflow from US spot bitcoin exchange-traded funds (ETFs) on 15 September, while bitcoin’s value dropped below $76,000. In Washington, Rep. Maxine Waters blamed the absence of ethics safeguards relating to the president’s crypto ventures, while Rep. Tom Emmer described the result as only a delay.
Armstrong said the defeat was disappointing but argued that the Securities and Exchange Commission (SEC) and CFTC already had the authority to establish rules. SEC Chair Paul Atkins said the SEC would “act decisively within the SEC’s statutory authority”, while CFTC Chairman Mike Selig said his agency was “locked in and ready to ship its rules.”
Seven Democratic senators pledged on 16 September to continue supporting the legislation.
Armstrong ended his post by saying: “people are smart enough to see through it these days, and it backfires on them every time.”
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