The CLARITY Act Failed In The Senate. But Coinbase CEO Armstrong Says Crypto Has Another Path Forward.

Coinbase CEO Brian Armstrong is moving on from the crypto industry's biggest legislative setback in years, saying federal regulators offer another route for digital assets after the Senate failed to advance the CLARITY Act this week.

"We let politics get in the way, I guess," Armstrong said of the bill in an interview with the Daily Wolf. He now assumes the legislation is dead and believes the industry can instead work through federal regulators, telling Yahoo Finance that "there's another path, luckily, with the regulators, the SEC and the CFTC."

The Senate failed to advance the CLARITY Act on Tuesday after the measure received 50 votes, 10 short of the 60 required to clear the procedural hurdle. Four Republicans joined Democrats in voting against advancing the legislation, while Republican Sen. Thom Tillis of North Carolina switched his vote for procedural reasons that preserved his ability to seek reconsideration.

The vote followed months of negotiations over legislation designed to establish a federal framework for digital assets and clarify the respective roles of the Securities and Exchange Commission and Commodity Futures Trading Commission.

Republicans released revised legislation shortly before the vote that they said incorporated 126 substantive changes requested by Democrats. It included stronger restrictions involving public officials' crypto holdings, but they were not enough to secure Democratic support.

Democrats were seeking further concessions, including tougher ethics provisions addressing President Donald Trump's crypto interests and changes involving stablecoin rewards. Those disagreements helped leave one of Washington's biggest attempts to establish crypto market rules stalled in the Senate, IBTimes reported.

Coinbase was among the industry's most prominent supporters of federal crypto legislation, while crypto companies and allied groups spent more than $300 million combined during the 2024 and 2026 election cycles as they sought to increase their influence in Washington. The Senate defeat exposed the limits of that political push despite the industry's success in helping elect crypto-friendly candidates, as IBTimes reported.

Armstrong, however, is now pointing to regulators rather than Congress. The Coinbase chief said the SEC and CFTC have authority they can use to establish rules for parts of the digital-asset market, an argument he also made immediately after the Senate vote.

The regulatory route was already taking shape this week. The SEC on Thursday granted five years of temporary, conditional relief allowing qualifying Tokenized Securities Venues to trade tokenized versions of U.S.-listed stocks without being treated as traditional exchanges under certain provisions of federal securities law.

The exemption applies to tokenized National Market System stocks traded through permissioned automated market makers and liquidity pools. Issuers must also have an opportunity to object before their shares are traded through one of the venues, the SEC said.

SEC Chair Paul Atkins explicitly linked the move to the failure of the CLARITY Act, saying the agency was acting within its existing statutory authority after Congress was unable to advance the legislation. The exemption also gives certain liquidity providers temporary relief from dealer-registration requirements.

The CFTC has also been moving ahead with additional products under its existing authority. Prediction-market operator Kalshi was approved last week to list perpetual futures contracts tied to precious metals, while Coinbase is seeking to list perpetual futures linked to other assets, including individual stocks and indexes.

Coinbase had already been preparing for the possibility that Congress would fail to pass the legislation. Chief Financial Officer Alesia Haas said before the Senate vote that the company saw three routes toward clearer crypto rules: Congress, federal agencies or the courts. If legislation failed, Coinbase believed it still had a route through the SEC and CFTC, she told Yahoo Finance.