Hey all, Liam here. 

We’re barely two weeks into the new year, and the crypto market structure bill is already off to a very slow — and controversial — start. 

This time it’s due to the crypto powerhouse Coinbase. 

After the exchange pulled its support for the bill on the eve of its Senate vote last week, White House officials are apparently “furious” and may now even pull their backing, too. 

“The White House is said to be furious with Coinbase’s ‘unilateral’ action on Wednesday, which it apparently was not notified of in advance, calling it a ‘rug pull’ against the White House and the rest of the industry,” independent journalist Eleanor Terrett said on Friday.

Brian Armstrong, Coinbase’s CEO, fired back, saying there hasn’t been a meaningful split. “Actually, we’ve been cooking up some good ideas on how we can help the community banks, specifically in this bill,” he wrote. 

Still, he didn’t hesitate to outline several key reasons his company was unwilling to support the latest version of the bill. 

Last week, he cited a “de facto ban on tokenised equities,” “erosion of the CFTC’s authority,” and amendments that would “kill rewards on stablecoins.”

“We’d rather have no bill than a bad bill,” he concluded. 

Neither the White House nor Coinbase responded to requests for comment.   

The market structure bill was widely expected to pass in 2025, given the US administration’s lenient stance on crypto. 

Essentially, it would bring the rest of the crypto industry, beyond stablecoins, into the regulatory fold. 

It’s far more impactful than the Genius Act, the landmark digital dollar legislation passed last July, Matt O’Connor, founder of fundraising platform Legion, told me in December. 

That’s why it’s surprising that one of the bill’s biggest beneficiaries would slow down the process. 

The bill would delegate regulatory oversight of the industry between the Securities and Exchange Commission and the Commodity and Futures Trading Commission. 

The SEC would first determine whether a cryptocurrency is a commodity or a so-called ancillary asset. If the former, the project or company would fall under the CFTC’s jurisdiction. If the latter, the SEC would oversee the company. 

This, for Armstrong, is still far too much power for the SEC. 

Equally, he’s aware of a key advantage his company currently enjoys that banks don’t. Users holding stablecoins enjoy much higher yields — or “rewards,” as Coinbase prefers to call them — than is typically earned in a savings account. 

The current market structure bill would close this loophole. 

Meanwhile, the clock’s ticking as US politicians gear up for a hugely important midterm election this fall. 

Republicans, who have historically been far more pro-crypto, control the House, Senate, and the White House. 

“Whether it happens at all will depend on how the midterms go, and with the odds being that a solution passing both houses will be harder to arrive at if Democrats control one of the chambers,” Bill Hughes, director of global regulatory matters at Consensys, told me in December.

Harder isn’t impossible, however. Early versions of the market structure bill gathered bipartisan support. 

Likewise, the Genius Act passed with significant Democrat support.

ICYMI

• Coinbase denies White House split claims as Clarity Act divisions deepen
  There’s been no split between Coinbase and the White House over new landmark crypto legislation, says the exchange’s Chief Executive Brian Armstrong.

• How Bitcoin price will fare amid Trump’s ‘Erdoganisation of Fed’
  Donald Trump’s feud with the Federal Reserve has an ugly precedent — Turkey.

• Fraudsters jailed for laundering voice phishing ring’s $1m in USDT
  The 41-year-old head of an illegal crypto exchange will serve five years in jail after using Tether’s USDT, a dollar-pegged cryptocurrency, to launder $1 million for a voice phishing ring.

Latest from DL Research

Story of the week

Trump threatens legal action against JPMorgan in ongoing ‘debanking’ saga

President Trump last year claimed that JPMorgan Chase cut him off as a customer before Bank of America also denied him services.

His son, Donald Trump Jr., said his family had no choice but to get into digital assets after banks refused to give them services following the 2021 United States Capitol attack.

“This statement is totally untrue, there was never such an offer and, in fact, I’ll be suing JPMorgan Chase over the next two weeks for incorrectly and inappropriately DEBANKING me after the January 6th Protest, a protest that turned out to be correct for those doing the protesting — The Election was RIGGED,” the Truth Social post read.

Post of the week

No rest for the weary. After a busy week in the US, Armstrong has landed in Davos this week ahead of the World Economic Forum, where world leaders and titans of industry will gather.

His goal?

“Economic freedom.”

DL News is an independent news organisation that provides original, in-depth reporting on the largely misunderstood world of cryptocurrency and decentralised finance. From original stories to investigations, our journalism is accurate, honest and responsible.

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