30th January 2026 > > Coinbase & the CLARITY Act.

tl;dr

Coinbase is banned. Sort of. The CLARITY Act makes some progress, but it could have been all the sweeter.

Market Snap

Market Wrap

BTC almost breached $81k to the downside yesterday triggering $2bn or so of leveraged liquidations, mostly longs though somehow some shorts managed to trade with such naivety they got taken out too. This was a 35% drawdown from October’s ATH which is not out of the ordinary during a secular bull market, though it never feels that way at the time. The wider concern is that another near $1bn left the spot BTC ETFs yesterday taking us to a total outflow of $2.7bn in just nine trading days. Only one of those of days shows a net inflow but quoted at a miniscule $7mm that is merely a rounding error.

Curious Cryptos' Commentary – Coinbase advert

I am sure you all recall the Coinbase advert last year that highlighted some – how shall I put this – deficiencies in the UK that affect us Brits.

Well, memory is all you have got now.

What is it about all politicians that they like banning stuff?

Curious Cryptos' Commentary – The CLARITY Act

Confusingly, the digital asset market structure bill is known as the CLARITY Act in the Senate Banking Committee and as the Digital Commodity Intermediaries Act in the Senate Agricultural Committee. Both have similar objectives and some similarities in substance. Eventually one or other, or perhaps some hybrid of the two, will make it onto the statute book. In the meantime, the CC’s editorial decision is to generically refer to both as the CLARITY Act, as it is the snappier name.

Notwithstanding the likely government shutdown, the Senate Agricultural Committee voted on three amendments to their version of the act yesterday. If you recall, Brian Armstrong, CEO and founder of Coinbase, has publicly distanced both himself and his company from all current variants stating that no legislation is better than bad legislation. Here at CC Towers, we politely but very firmly rebuff Brian’s stance on this narrow point. It seems that Coinbase’s 150 extremely well-qualified and highly remunerated lawyers are looking to get into a street fight with the CC research team, a fight they will long regret.

The three votes yesterday on amendments to the bill all failed with a split purely on partisan lines, which is always a terrible disappointment to me. On the upside the bill has been advanced for a floor vote in the full chamber but not in ideal circumstances. Kevin Wysocki, head of policy at Anchorage Digital, takes a similar view to CC about where to go from here:

“Merging this with the Banking Committee’s text – and doing so on a bipartisan basis – is the only way to get this over the finish line.”

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If we look at the three amendments voted down by Republicans, I think that perhaps at least one mistake has been made.

The first amendment must be seen in the light that the CFTC (the commodities regulator) currently has only one commissioner, out of five, with no-one else yet put forward. Senator Amy Klobuchar put forward a proposal that even if the bill is passed, the authority for the CFTC to regulate a large swathe of the crypto markets be delayed until there are at least four commissioners:

“We can’t give this CFTC this broad new authority when it only has one member, one Republican member.”

I cannot fault her logic, though the political affiliation of the commissioner concerned is neither here nor there. It’s a cheap shot that does her central point disservice.

A second amendment was to incorporate an ethics provision which was intended to prevent “elected officials from profiting off the crypto industry”. I think we all know the subtext to that one.

The final amendment was put forward by Senator Dick Durbin, that would ensure that “federal agencies not provide financial assistance to a digital asset commodity intermediary to prevent the failure or bankruptcy of the digital asset commodity intermediary.” The counter argument was that this was entirely unnecessary as the bill does not grant that authority to the CFTC or the SEC.

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If all three amendments had been accepted by a unanimous vote, that would have sent a very strong signal to the Senate to crack on and get this done. All three amendments seem perfectly acceptable to me given the imperfect world we live in. A real opportunity has been missed, to the detriment of literally everyone living on this planet.