Key Takeaways

• The Senate progress of the Digital Asset Market CLARITY Act slowed after Brian Armstrong, CEO of Coinbase, withdrew support for the Senate draft, leading to a delayed Banking Committee markup.
• Industry concerns around agency jurisdiction, DeFi provisions, and stablecoin economics suggest the current bill text may undergo further revisions before advancing.
• Until legislation is finalized, founders and investors may need to navigate ongoing regulatory guidance from the SEC and the CFTC, while accounting for continued legal and market uncertainty.

This past week wasn’t just another seven days in Washington policy cycles. It was the one where the U.S. crypto industry’s most powerful corporate voice — Brian Armstrong, CEO of Coinbase — pulled support for the Senate’s version of the CLARITY Act at a moment when a Senate Banking Committee vote was imminent.

That pivot has reshaped the political landscape, halted a scheduled markup, and forced Senators — and entrepreneurs — to rethink their strategy for a bill that until recently looked on the brink of passage.

As a result, many founders and investors are now asking: is the CLARITY Act dead, or entering a critical renegotiation phase?
If you’re building a blockchain protocol or planning a token capital raise, this is the update you can’t afford to miss.

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Where the CLARITY Act Actually Is Right Now

Let’s get the basics straight. The Digital Asset Market CLARITY Act of 2025 (H.R. 3633) passed the U.S. House and was sent to the Senate Banking Committee for consideration. 

According to the official record at Congress.gov, the bill’s goal is to create a clear regulatory framework for digital assets by dividing authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). 

It sets definitions for digital commodities vs. investment contracts and lays out licensing, disclosure, and enforcement structures. (Senate Banking Committee)

In practical terms, CLARITY was meant to give founders predictable rules of the road so they could raise capital, list tokens, and innovate with regulatory certainty — instead of relying on enforcement actions and subjective interpretations that have dominated for years.

By early January, the Senate Banking Committee was preparing a markup (a clause-by-clause vote on the bill and its amendments), with a tentative schedule for January 15, 2026. 

A successful markup would have sent the bill to the Senate floor, setting up a likely vote and reconciliation with the House text. (Coinpedia Fintech News)

Then the tectonic shift happened.

Brian Armstrong Pulls Support — And the Markup Slips

On January 14, 2026, Coinbase CEO Brian Armstrong publicly withdrew his support for the Senate’s version of the CLARITY Act. Armstrong posted on social media that after reviewing the latest draft, Coinbase could not support the bill as written. 

Among his reasons:

• What Coinbase described as a de facto ban on tokenized equities
• DeFi restrictions that could provide excessive government access to private financial data
• Language that erodes the CFTC’s authority in favor of the SEC
• Proposed restrictions on stablecoin rewards that would advantage banks over crypto projects

Armstrong said that while he appreciated bipartisan effort, this version was “materially worse than the current status quo” and that “we’d rather have no bill than a bad bill.” (Yahoo! Finance)

That statement had immediate consequences: the Senate Banking Committee delayed the scheduled CLARITY Act markup, halting what was seen as the most important week of the legislative cycle to date. (Decrypt)

This was not a minor industry whisper. Coinbase is arguably the most influential U.S. crypto platform, and Armstrong’s stance resonated on Capitol Hill. 

Multiple Senate offices indicated that his opposition eroded confidence in the bill’s ability to hold a bipartisan coalition, especially among moderate Democrats who were wary of perceived overreach or unworkable provisions.

Why Armstrong’s Shift Matters Politically — and for Builders

Armstrong’s withdrawal wasn’t just a critique; it’s a positioning move. For months, he had been publicly hopeful about CLARITY’s prospects. 

In mid-2025, he described the bill as a “freight train leaving the station” and urged bipartisan action. Now he’s saying the current text is worse than the status quo and needs substantive improvement. (Cointelegraph) 

That shift signals several broader dynamics:

1. Industry Leadership Is Now More Skeptical of a Compromise Bill. Founders and executives are less willing to accept half-measures that could lock in regressive provisions or ambiguous controls under regulatory authority.
2. Regulatory Turf Matters. One of Coinbase’s core objections was that the current draft shifts power toward the SEC at the expense of the CFTC. For founders hoping to see digital commodities treated separately from securities law, that’s no small point — and it reflects a broader industry concern. (Yahoo! Finance)
3. Stablecoin Economics Are Central. Restrictions on stablecoin yield or rewards — language that came into the bill through amendments influenced by banking lobby priorities — are deeply unpopular with crypto entrepreneurs who see stablecoins as foundational to blockchain capital flows.

Armstrong’s stance, and the subsequent markup delay, make it clear: Industry support is no longer a given. And without it, Congress may retool the bill before advancing.

What This Week Meant for Capital-Raising Strategy

For founders planning token issuances or protocol financing tied to CLARITY’s framework, this week’s news is a warning and an opportunity.

Warning: Don’t Assume the Bill You’ve Read Is the Bill You’ll Get.

The Senate Banking draft — the version Armstrong rejected — would have created statutory definitions and paths for token classifications. 

But with markup delayed and language criticized by industry, we should assume more negotiation and change is coming. 

That means protocols structured around one static interpretation could find themselves out of sync with the final law.

Opportunity: Industry Voice Still Matters.

Armstrong’s decision shows industry leaders can influence legislative outcomes, not merely react to them. Coinbase and others can now push for amendments that preserve:

• CFTC role for digital commodities
• Minimal intrusion into DeFi protocol logic
• Stablecoin utility outside of traditional banking constraints

Founders should engage — both directly and through trade groups — to shape revisions rather than wait until a compromised bill is forced through.

Regulators Still Moving Ahead — With or Without CLARITY

While Congress grappled with legislative text and industry pushback, regulators continued acting in ways that complement the broader spirit of CLARITY.

Project Crypto & SEC Signals

The SEC’s Project Crypto initiative continues to outline how the agency will approach digital assets in the absence of finalized legislation. The initiative includes efforts to modernize classification, disclosure, and enforcement standards so that token markets can operate with clearer expectations even before statute. The SEC’s Crypto Task Force remains an active internal engine for this work, focusing on practical guidance for token offerings and compliance expectations. (Cointelegraph)

CFTC Engagement

Although there were no new formal CFTC releases this week, its ongoing Crypto Sprint and earlier joint SEC/CFTC staff statements on spot trading remain the de facto regulatory path for spot market activity. These statements make explicit that compliant trading on registered venues is not prohibited under current law, and they invite engagement from market makers and exchanges. For founders, that means the plumbing of regulated markets can precede statute. (Cointelegraph)

In effect, regulators are operating on the assumption that a statutory framework will eventually take shape — and they’re building toward that future rather than waiting for it.

The Forward View: What Comes Next

With this week’s developments, here’s how I would frame the pathway ahead:

1. Senate Banking Committee Renegotiation. The markup delay is a pause, not a cancellation. But expect significant changes in language — especially around DeFi, token classification, stablecoin terms, and agency jurisdiction — before another markup is scheduled.
2. Industry Coalition Pressure. Coinbase’s formation (and implied potential lobbying push) gives Senate offices a new negotiating partner with real clout. Other industry players may coalesce around changes that protect innovation without sacrificing investor safeguards.
3. Regulatory Guidance Will Continue to Shape Practice. Independent of statute, the SEC and CFTC will keep refining how they treat token markets. Issuers who pay attention to evolving guidance will have a head start when the law lands.
4. Capital Markets Will Price in Uncertainty — Then Optionality. If founders can design offerings that are compliant under both the current regime and projected statute, they’ll attract a broader range of investors and avoid the need for costly redesigns later.

Bottom Line

This past week revealed that clarity isn’t guaranteed. A high-profile withdrawal of support from Brian Armstrong and the subsequent Senate markup delay tell us that industry influence matters — and that the final CLARITY Act will be different from the bill we reviewed at the end of 2025.

For anyone raising capital: build defensively and strategically. Structure your token economics for flexibility. Engage with regulators and lawmakers. Understand that the U.S. market is almost there, but the details still matter enormously.

The goal isn’t just a bill passed — it’s a good law enacted that empowers builders rather than handicaps them. That’s worth the extra negotiation.

Read More: Clarity Is Still in Motion — But the Rails Are Being Laid

Launch an ICO on StartEngine

The CLARITY Act could provide a clear legal framework for token-based fundraising. If you’re building a blockchain project and want to be among the first to launch a regulated ICO in the U.S., StartEngine wants to hear from you.

Apply to Raise »

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