Jeff Dorman, CIO at Arca, is calling out Coinbase for blocking the CLARITY Act when it mattered most. Back in January, the exchange and founder Brian Armstrong opposed the bill during Senate markup, torpedoing its chances. Now, with the Senate heading into recess on August 6th and only a narrow window to act, the bill faces a less than 10% shot at passage. The irony stings: Coinbase is now pushing for the same bill it helped kill five months ago.

The timeline matters. CLARITY cleared markup in May after flopping in January, giving it a second life. Industry players and the White House both said issues Coinbase flagged would've been hammered out later anyway. But the damage was already done. Dorman didn't mince words on social media: this is now "political theatre" because of decisions made in the new year.

Coinbase Says It Saved the Bill

The exchange's leadership pushes back hard. Kara Calvert, Coinbase's VP of U.S. Policy, argues the January opposition actually improved things. The original version would've "killed rewards, tokenization and hurt developers," she said. By blocking it then, Coinbase forced a better outcome. Chief Policy Officer Faryar Shirzad echoed this: the January draft would've "fractured the industry and effectively killed the bill" if passed as written.

Both executives now say they have "a very good bill teed up for passage." Whether that's spin or substance depends on who you ask. What's clear is the bill's odds have collapsed. Passage odds now sit at 25%, down from what they were before the August recess window opened.

What Happens If It Dies

Bernstein analysts warn crypto markets could face a new round of selling pressure if CLARITY stalls completely. But there's a backup plan. The SEC and CFTC will accelerate rulemaking on their own if Congress bails. The SEC is already building a tokenization framework. The catch: regulatory moves without Congressional backing can get torn apart in court, leaving the industry in legal limbo.

This article is for informational purposes only and does not constitute financial or investment advice.