Major

America

Brian

<a href="https://www.thestreet.com/crypto/policy/coinbase-ceo-slams-bessents-comments-on-stalled-crypto-bill" rel="noopener noreferrer nofollow">Brian Armstrong</a>, co-founder and CEO of the&nbsp;<a href="https://www.thestreet.com/crypto/markets/bank-of-america-predicts-big-upside-for-coinbase" rel="noopener noreferrer nofollow">Coinbase</a> (Nasdaq: COIN) crypto exchange, has been at the forefront of the industry's struggle to get the&nbsp;<a href="https://www.thestreet.com/crypto/markets/biggest-regulatory-bill-since-dodd-frank-added-to-senate-calendar" rel="noopener noreferrer nofollow">Digital Asset Market Clarity Act</a> passed in the U.S. Congress.
The bill seeks to establish a comprehensive regulatory framework for crypto assets after years of overlapping enforcement and legal ambiguity.
But the legislation has been <a href="https://www.thestreet.com/crypto/business/ripple-ceo-delivers-a-sharp-message-to-jpmorgans-dimon" rel="noopener noreferrer nofollow">facing a challenge</a> from the banking industry, which believes its provision allowing stablecoin rewards risks bank account holders pivoting to reward-bearing stablecoins.
Meanwhile, Armstrong has not been willing to give up and even <a href="https://x.com/brian_armstrong/status/2011545247105355865?s=20" rel="noopener noreferrer nofollow">withdrew</a>&nbsp;his support for the Senate draft in January so that the provision doesn't get diluted or removed.
<a href="https://www.thestreet.com/crypto/markets/coinbase-ceo-has-a-radical-fix-for-americas-36-trillion-debt" rel="noopener noreferrer nofollow">Related: Coinbase CEO has a radical fix for America's $36 trillion debt</a>
<h2 id="law-enforcement-groups-critical-of-clarity-act">Law enforcement groups critical of CLARITY Act</h2>
The CLARITY Act had also been facing opposition from another quarter.
Law enforcement agencies had <a href="https://www.thestreet.com/crypto/markets/mysterious-trader-buys-millions-ahead-of-white-house-meet-on-june-10" rel="noopener noreferrer nofollow">expressed</a> their concern that the bill's provision concerning&nbsp;developer protections&nbsp;could make it harder to combat illicit finance.
As per the&nbsp;bill's&nbsp;<a href="https://www.banking.senate.gov/imo/media/doc/ehf26374.pdf" rel="noopener noreferrer nofollow">section (604)</a>,&nbsp;software developers who don't mean to ultimately control the tools they're enabling shouldn't be held legally responsible as "money transmitters."
<a href="https://1inch.com/" rel="noopener noreferrer nofollow">Decentralized finance (DeFi)</a>, as the name suggests, is an ecosystem that sustains a financial system that isn't controlled by a central body like a bank or an executive. It executes operations when the protocol's conditions are met.
Due to DeFi's anonymous nature, several bad actors use these tools for illegal purposes, and law enforcement agencies go after the developers who created these tools.
But the crypto industry argues developers shouldn't be held responsible for the actions of bad actors because the former don't have centralized control over the DeFi tools.
However, the law enforcement groups were hardly convinced.
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<h2 id="mcsa-shifts-policy-outlook-to-neutral">MCSA shifts policy outlook to 'neutral'</h2>
For instance, the Major County Sheriffs of America (MCSA)&nbsp;<a href="https://mcsheriffs.com/legislation/05-13-2026-digital-asset-market-clarity-act-concerns-letter" rel="noopener noreferrer nofollow">wrote a letter </a>to Senate Banking Committee chair Tim Scott and ranking member Elizabeth Warren in May and said sophisticated criminals could exploit the gaps in&nbsp;oversight and accountability in the current form of section 604.
The MCSA urged the committee to keep&nbsp;working with law enforcement to further refine this section and address their concerns.
<blockquote>
 "We believe it is possible to support innovation and growth in the digital asset industry while also ensuring that safeguards, analogous to traditional financial regulatory frameworks, remain in place to protect public safety and preserve effective enforcement tools."
</blockquote>
But the group seems to have taken a sudden shift in its approach. Journalist Eleanor&nbsp;Terrett <a href="https://x.com/EleanorTerrett/status/2073137047834116291" rel="noopener noreferrer nofollow">reported</a> that the MCSA wrote to Scott and Warren on July 3 to inform them that it&nbsp;has&nbsp;shifted to a “neutral” position on the Clarity Act after continued discussions.
Nonetheless, the group fell short of endorsing the bill and even asked for a formal role for state and local law enforcement in the Treasury study required under Section 309 and any relevant advisory bodies.
Armstrong, who is among the foremost crypto industry leaders fighting for the bill in Washington, <a href="https://x.com/brian_armstrong/status/2073217060729950675" rel="noopener noreferrer nofollow">had</a> a characteristic one-word response to the development: "Huge."
The response reflects how crucial any progress on the bill is to the Coinbase founder.
The House passed its version of the CLARITY Act with a 294-134 vote in July&nbsp;last year. The Senate Banking Committee <a href="https://www.thestreet.com/crypto/markets/live-clarity-act-enters-final-stage-after-senate-committee-vote" rel="noopener noreferrer nofollow">advanced</a> it with a 15-9 bipartisan vote in May this year, with a floor vote being keenly awaited.
<a href="https://www.thestreet.com/crypto/policy/4000-u-s-local-banks-warn-key-bill-could-drain-1-3-trillion" rel="noopener noreferrer nofollow">Related: 4,000 U.S. local banks warn key bill could drain $1.3 trillion</a>

Coinbase CEO has one-word response to sheriffs group's sudden shift

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