Arca CIO Jeff Dorman says Coinbase 'killed' the CLARITY Act in January. With Senate recess looming, passage odds drop to 25%. Bernstein warns of selling pressure if bill stalls.
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Arca CIO Jeff Dorman blames Coinbase for 'killing' the CLARITY Act in January. The bill now faces a narrowing window for a Senate floor vote. Odds of passage have slipped to 25%.
Dorman said the exchange and its founder Brian Armstrong were responsible for the bill's initial failure, which cost it enough time to pass. He posted on social media: "The irony in this post considering we probably would have had already had CLARITY if Coinbase/Armstrong hadn't killed it back in January 2026. Instead, it's now political theatre with a less than 10% chance of happening in our opinion."
Coinbase leadership pushed back. Kara Calvert, the exchange's VP of U.S. Policy, said the bill has improved since its opposition. "We opposed the bill because it would've locked in problematic provisions that would have killed rewards and hurt developers. Nobody wanted that, and the bill is vastly improved today," she said. Chief Policy Officer Faryar Shirzad echoed the sentiment. He argued the January version would have "killed" the industry if passed as written. "That would have been bad in and of itself, and it would have fractured the industry and effectively killed the bill," Shirzad said. "We now have a very good bill teed up for passage."
The CLARITY Act cleared the Senate markup hurdle in May after its January flop. Industry players and the White House have said the issues Coinbase raised would have been resolved later. The Senate is expected to go on recess August 6 and return September 14. The first week of August was seen as the last window for the bill's passage. Ethics provisions remain unresolved.
Bernstein analysts expect a new round of selling pressure in the crypto market if the bill stalls. They said U.S. regulators, including the CFTC and SEC, would accelerate rulemaking for the sector if the bill fails.
The SEC is already working on a tokenization framework. Such moves can be challenged in court, however, if they lack Congressional legislation backing them.
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