White House Threatens to Pull Support for Crypto Market Structure Bill

Highlights:

• The White House has threatened to pull support after Coinbase withdrew from the crypto bill talks.
• The crypto market structure bill is facing delays as stablecoin and DeFi concerns divide stakeholders.
• Lawmakers have paused the next steps while the industry and administration are deep into negotiations.

The White House is weighing whether to withdraw political backing for the crypto market structure bill after a sudden clash with Coinbase. The review follows Coinbase’s decision to pull support just days before a planned Senate markup. Fox Business reporter Eleanor Terrett cited a source close to the Trump administration on the matter. Officials reportedly felt blindsided by the move and described it as disruptive. As a result, the administration has begun reassessing its position.

WHITE HOUSE ANGRY, CONSIDERS WITHDRAWING SUPPORT FOR CLARITY BILL AFTER COINBASE CEO MOVE

🔹 Eleanor Terrett said the White House is extremely angry and is considering pulling its support for the crypto market structure bill (CLARITY) after Coinbase’s CEO took unilateral action… pic.twitter.com/dc2U2MTFMI

— ThuanCapitalGlobal (@ThuanGlobal) January 17, 2026

The source states that the administration sees the legislation as a government-directed initiative but not an industry-based one. The officials feel that the bill represents more economic and regulatory interests. They further claim that a sudden public turnabout is a betrayal of months of planning. Due to this force, the White House officials are doubting the possibility of their continued support. The controversy has introduced new uncertainties into the way the bill proceeds.

According to individuals who were privy to the deliberations, the announcement made by Coinbase was met with a furious reaction by White House officials. They considered that the move was unilateral and untimely. The source reported that authorities called the move a “rug pull” on policymakers and industry partners. They feel that the withdrawal undermined trust at a sensitive moment in the legislation. As a result, in-house discussions commenced on whether or not to walk out of the bill.

The administration also anticipates that key industry players will express their concerns through negotiations. According to officials, public pressure complicates compromise in late-stage drafting. They emphasize that one specific company should not determine the results of legislation. The support of the administration now hinges on the possibility of resuming the talks on a constructive basis.

Coinbase Objections Reshape the Crypto Market Structure Bill

Coinbase CEO Brian Armstrong said the exchange could not support the current draft. He argued that the bill, as written, would damage parts of the crypto ecosystem. Armstrong stated that Coinbase prefers no legislation over a flawed framework. However, he also signaled openness to a revised proposal.

After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can’t support the bill as written.

There are too many issues, including:

– A defacto ban on tokenized equities
– DeFi prohibitions, giving the government unlimited access to your financial…

— Brian Armstrong (@brian_armstrong) January 14, 2026

Armstrong outlined several concerns tied to the crypto market structure bill. He warned the draft could effectively block tokenized equities in the United States. He also pointed to sweeping limits on decentralized finance activity. In addition, he raised alarms about expanded government access to financial records. These issues, he said, threaten innovation and user privacy.

Armstrong further criticized the bill’s regulatory balance. He argued it weakens the Commodity Futures Trading Commission’s role. At the same time, it concentrates authority at the Securities and Exchange Commission. The enforcement-oriented practice of the SEC has been criticized by numerous crypto companies. These structural issues aggravated resistance among sections of the industry.

Stablecoins also became a significant point of contention. Armstrong cautioned that the draft threatens to take away incentives associated with stablecoin holdings. He claimed such restrictions would protect banks against competition. Banking groups object that stablecoin yields would initiate deposit outflows.

Lawmakers Weigh Next Steps as Negotiations Stall

Industry leaders and lawmakers have also weighed in on the stalled negotiations. Galaxy Digital CEO Mike Novogratz said he expects the Crypto Market Structure Bill to advance soon. He said recent discussions with senators left him optimistic about progress. “I think this bill will get passed in the next two weeks,” Novogratz said.

Morning thoughts! https://t.co/ck3LIxaAzB

— Mike Novogratz (@novogratz) January 16, 2026

Senator Mark Warner said he still sees a way forward. Senator Cynthia Lummis also urged patience as discussions reset. She said participants need time to absorb recent developments. Meanwhile, industry figures remain split on the outlook for the crypto market structure bill.