Coinbase CEO Brian Armstrong is ramping up pressure on the Senate to pass the CLARITY Act, arguing the digital asset market structure bill will protect consumers from another FTX-style collapse while giving crypto businesses clear rules to operate under in the United States.
Armstrong's Case for the Bill
Armstrong said the CLARITY Act reflects thousands of hours of bipartisan work and would strengthen consumer protections and law enforcement capabilities in the crypto sector. He cited polling showing 70% public support for clearer crypto regulations, framing the legislation as a response to what voters want.
The bill would establish a clear regulatory framework distinguishing between digital assets that are securities and those that are commodities, resolving a question that has kept many crypto businesses in legal limbo. Armstrong argued that without this clarity, companies will continue moving offshore where oversight is weaker.
Preventing the Next FTX
Armstrong pointed to the collapse of FTX as the primary example of what happens when crypto regulation remains ambiguous. The CLARITY Act would broaden consumer protections and prevent a repeat of the FTX fallout, he said, by establishing clear rules for custody, trading, and disclosure.
The bill would also give regulators explicit authority to police crypto markets, closing gaps that allowed FTX to operate with minimal oversight for years before its collapse in late 2022.
The September Senate Vote
The CLARITY Act faces a critical Senate vote in September. Armstrong expressed optimism about the bill's chances, saying it has gained bipartisan support and is near the finish line. However, the bill's ethics clause regarding President Trump's crypto holdings has become a sticking point.
A recent poll showed 63% of Americans believe Trump crossed ethical lines with his crypto involvement, complicating the political calculus for senators considering the bill. The ethics clause does not require divestment, and banking committee staff have said it would not stop Trump from profiting from his crypto holdings.
What the Bill Would Change
For crypto businesses, the CLARITY Act would provide the regulatory certainty they have been requesting for years. Companies would know which assets fall under SEC jurisdiction and which fall under CFTC oversight, reducing the legal ambiguity that has led to enforcement actions and litigation.
The bill would also encourage crypto businesses to operate in the U.S. rather than offshore, Armstrong said, bringing jobs and tax revenue back to American shores. The September vote will determine whether the crypto industry finally gets the regulatory framework it has been seeking.
