A two-front war
The collapse of the 15 Jan deadline marks a significant failure for the committee’s leadership, which had spent months attempting to find a middle ground between the crypto sector and traditional finance. The "Clarity Act", which was intended to expand on the stablecoin-focused GENIUS Act passed in July 2025, is now buried under more than 137 proposed amendments.
Coinbase’s exit was the primary catalyst for the legislative gridlock. Armstrong argued that the current draft would leave the industry in a worse position than the existing regulatory regime. His primary objections centered on provisions that would effectively ban tokenized equities and hand the Securities and Exchange Commission (SEC) final jurisdiction over token classification. Armstrong’s public "no bill is better than a bad bill" stance has fractured the industry's unified front, leaving some advocacy groups to scramble for a compromise while others retreat to defensive positions.