Coinbase CEO Brian Armstrong just torpedoed what was supposed to be crypto's biggest legislative win. The Digital Asset Market Structure Framework, designed to create clear federal rules for cryptocurrency regulation, hit a wall when America's largest crypto exchange pulled its support. Armstrong declared he would "rather have no bill than a bad bill" after reviewing the latest draft from Senator Tim Scott.
The timing couldn't be worse. The Senate Banking Committee was set to mark up the bill on January 15 but postponed the session after Coinbase withdrew backing. This matters because Coinbase spent millions through political action committees during the 2024 election cycle supporting pro-crypto candidates. Lawmakers view the exchange's endorsement as essential for any crypto legislation to pass Congress.
Armstrong's objections read like a crypto wish list gone wrong. The current draft bans stablecoin yield rewards, blocks tokenized stocks, gives unlimited government access to user financial records, and puts the CFTC in a weaker position compared to the SEC. For Coinbase, these provisions would fundamentally change how crypto operates in America.
White House Strikes Back
The Trump administration reportedly went nuclear over Coinbase's surprise withdrawal. According to journalist Eleanor Terrett, sources close to the White House described officials as "furious" about Armstrong's "unilateral decision." They called it a "rug pull" against both the administration and the broader crypto industry.
One administration source made the power dynamic crystal clear: "This is President Trump's bill at the end of the day, not Brian Armstrong's." The White House is now considering pulling its support entirely unless Coinbase returns to negotiations and accepts a stablecoin framework that works for major banks.
The administration's frustration makes sense from a political perspective. Trump campaigned on crypto-friendly policies and appointed pro-digital asset officials. Having the industry's biggest player reject the signature legislation embarrasses the administration and undermines Trump's promises to crypto voters.
