Coinbase supported the tougher CLARITY Act after Senate Democrats added customer protections, as its 2026 approval chances dropped to 31% for Polymarket amid controversy over ethics rules involving President Donald Trump.
Summary
- Coinbase supports the revised CLARITY Act after Democrats secured stronger customer protections.
- White House opposition to crypto ethics rules threatens Senate vote before August.
- Polymarket traders put the chance of the bill becoming law in 2026 at 31%.
Coinbase vice chairman Ryan VanGrack told CNBC on Monday that Democrats had secured stronger consumer protections during closed-door negotiations on the Senate’s final text. He described those changes as giving the law “more teeth,” though he did not provide details about the provisions or indicate whether lawmakers have resolved a separate ethics dispute.
“At the end of the day, this is about consumer protection,” VanGrack said.
“The status quo doesn’t have this infrastructure, it doesn’t have these protections, and the Democrats have used this opportunity, smartly, to make sure that customers are first and foremost [this bill].”
According to VanGrack, these additional protections address gaps in the current US framework for digital goods businesses and their customers. His comments also reflect Coinbase’s support for negotiations after the exchange opposed the Senate’s previous draft earlier this year.
CEO Brian Armstrong announced in January that Coinbase could not support the law as written at the time, a decision that may have contributed to the Senate Banking Committee’s delay. Since then, Coinbase executives have publicly supported efforts to pass a revised bill, with chief legal officer Paul Grewal among those calling for the process to continue.
Lawmakers have not released the final Senate text or scheduled a floor vote as of Monday. Although VanGrack praised the consumer protection reforms, he did not say that the recent negotiations had produced a moral agreement capable of winning enough Democratic votes.
Trump ethics controversy holds up Senate deal
As crypto.news previously reported, Polymarket traders reduced the chances of the CLARITY Act becoming law in 2026 to 31% while the White House withheld support for the controversial ethics provision. The administration had not approved the proposed language as of July 20, according to sources cited in the report.
Those sources also said the White House did not tell Senate negotiators what restrictions it would accept. Without a clear position from the administration, the report said lawmakers may need more time to draft a revised version, putting Republicans’ timetable for a vote before the August recess in jeopardy.
Senate Majority Leader John Thune wants the court to consider the bill before lawmakers leave Washington, but he acknowledged that Republicans have yet to reach a bipartisan agreement. Because the party cannot clear the Senate process alone, Thune will need the support of Democrats to move the legislation forward.
Democratic lawmakers have tied their support to restrictions that target elected officials’ financial interests in digital assets. Their concern centers on Trump’s crypto activities, 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 income related to his memecoin, World Liberty Financial and other digital holdings. Democrats have highlighted such financial connections while pressing for ethical language in the market structure law, according to reports of Senate hearings.
Republican senators met with Trump on Thursday to discuss the bill, although the meeting did not reveal the White House’s public opinion on the disputed provision. Senate Democrats held their own closed-door meeting the previous day to assess whether they could support the legislation.
Coinbase’s support raises the pressure on consensus
Trump urged the Senate to pass the CLARITY Act and used the death of Senator Lindsey Graham to renew that call. In a statement posted on social media last week, the president asked leaders to pass the law “to honor” the South Carolina Republican, whom Trump described as a strong supporter of the proposal.
Although Trump has publicly endorsed the bill, the White House’s refusal to accept the code of conduct language has left negotiators without the agreement needed to move it forward. The disagreement pits the administration’s request for swift passage against Democratic demands that include officials with financial interests linked to crypto.
Recent support from Coinbase gives the bill industry approval from one of the largest US crypto exchanges. It also represents a change from Armstrong’s rejection in January of the previous version, although neither Coinbase nor VanGrack have publicly endorsed the ethics proposal.
Coinbase’s relationship with federal regulators has also changed since Trump returned to office. During the Biden administration, the Securities and Exchange Commission sued the exchange for allegedly operating as an unregistered securities exchange, broker and clearing agency.
After Trump took office, the SEC under Acting Chairman Mark Uyeda dropped the case. The agency’s withdrawal has removed one of Coinbase’s biggest regulatory disputes as Congress continues to work on legislation aimed at defining oversight of digital asset markets.
For Senate negotiators, the unresolved issue remains whether strong consumer protections can be combined with ethical restrictions that satisfy Democrats and win the approval of the White House. Until lawmakers publish a revised text and secure enough bipartisan support, Thune’s desired vote before the August recess remains uncertain, while Polymarket traders continue to price the low chance of approval this year.
