Citron Research on Thursday accused Coinbase CEO Brian Armstrong of opposing the Senate’s CLARITY Act to protect the exchange’s stablecoin yield business from new competition, as debate over the bill intensified in Washington and across the crypto industry.
The allegation has widened a public split within crypto, pitting Coinbase’s objections against other firms that still back the bill while lawmakers scramble to revive stalled negotiations.
Citron’s Claims Collide With Coinbase’s Public Stance
In a post on X, Citron Research argued that Armstrong’s recent comments on CNBC showed fear of competition from tokenized securities firm Securitize, which already holds the licenses needed to operate in that market.
Citron said Coinbase wants the benefits of regulatory clarity without opening the door to rivals, accusing the crypto firm of pushing back because a “cleaner version” of the bill could favor Securitize more than Coinbase.
The exchange formally withdrew support for the crypto market structure bill on January 14, with Armstrong listing several objections in a public statement. These included what he called a de facto ban on tokenized equities, expanded government access to DeFi user data, a shift of power away from the Commodity Futures Trading Commission (CFTC) toward the Securities and Exchange Commission (SEC), and draft language that could end stablecoin rewards.
Armstrong said Coinbase would “rather have no bill than a bad bill,” adding later the same day that he remained optimistic that changes were possible.
However, not all industry voices share Citron’s view. Crypto YouTuber George Tung, known as CryptosRUs, defended Armstrong, arguing banks are resisting stablecoins because of competition. Tung pointed to the gap between average U.S. savings account yields and stablecoin yields backed by short-term Treasuries, saying clear rules should let banks and crypto firms compete.
The dispute played out as the Senate Banking Committee postponed its scheduled markup of the crypto market structure bill on January 15. Committee chair Tim Scott said discussions were continuing across party lines and with industry, but no new date was set.
Industry Reactions and the Path Forward
Ripple CEO Brad Garlinghouse struck a more measured tone during remarks at a CfC St. Moritz panel. He said Coinbase had raised “fair concerns” but admitted surprise at how strongly Armstrong opposed the bill.
Garlinghouse added that most of the industry was still leaning in and trying to work through the issues, echoing comments he made earlier this week about staying engaged in the process.
Reporting from journalist Eleanor Terrett suggested tempers remain high behind the scenes. According to her, some lawmakers, staffers, and industry players were still angry about how the Banking Committee markup collapsed. However, she noted a belief among some stakeholders that the bill could recover if a deal on stablecoin yield is reached between banks, Coinbase, and Democrats in the coming days.
Terrett added that the tokenized securities provision, known as Section 505, may be less contentious than first thought. Some tokenization firms now say the language was taken out of context, while Armstrong and others are hopeful it could be changed or removed entirely, with the outcome of these adjustments possibly determining whether the CLARITY Act progresses or stagnates.