Launchy Regulatory Roundup #71 - Coinbase Withdraws Support for Senate Crypto Bill

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Welcome to our 71st edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

In Today's Edition:

• Headline: Coinbase Withdraws Support for Senate Crypto Bill 👀 

• Global Legal Roundup

• Case Study: Galaxy Warns Senate Crypto Bill Could Expand Surveillance 🔎 

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HEADLINE

Coinbase Withdraws Support for Senate Crypto Bill

State of play: Coinbase has pulled its support for a major Senate crypto market structure bill, citing a mix of timing issues and unresolved policy concerns.

• According to a source, the move was not driven by a single provision but by multiple red flags that emerged after updated bill text was released.

• Brian Armstrong pointed to four key problem areas: the treatment of tokenized equities, DeFi provisions, rules that could effectively end stablecoin rewards, and the expanded role of the SEC.

• Some sections, including new language around illicit finance, appeared for the first time in the latest draft and raised additional concerns.

• The bill, which runs over 270 pages, saw more than 70 amendments filed ahead of a planned Senate Banking Committee markup.

• With limited time to review changes and no clear path to resolving issues, Coinbase concluded the bill was not in the best interest of its users.

• Shortly after, Senate Banking Committee Chair Tim Scott postponed the markup, acknowledging ongoing negotiations across parties and industry.

What’s Next: While support for the bill remains fractured, negotiators say the issues are fixable and discussions will continue ahead of a future committee vote.

Why it Matters: When the largest US exchange steps back at this stage, it signals that the bill is not yet workable for core industry players.

Our Take: . If lawmakers want durable crypto policy, they need fewer last minute additions and more upfront alignment with market structure realities.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Robinhood CEO reaffirms support for CLARITY amid delay.

• 🇺🇲 House Democrats press SEC over pausing Justin Sun case.

• 🇺🇲 Senate Banking Committee says crypto bill is closer than ever.

• 🇺🇲 White House says Samourai case BTC will stay in strategic reserve.

• 🇺🇲 Senate crypto bill hits crunch time as amendments and lobbying ramp up.

• 🇺🇲 Senate Judiciary leaders push back on crypto bill to protect noncustodial devs.

Europe:

• 🇬🇧 UK committee chairs push for crypto political donations ban.

• 🇷🇺 Russia finalizes bill to open up crypto market to non-qualified traders.

• 🇧🇾 Belarus authorizes 'cryptobanks' combining token operations with traditional banking.

APAC:

• 🇹🇭 Bank of Thailand monitors USDT ‘grey money’ trades.

• 🇵🇰 Pakistan signs MOU with WLFI to explore USD1 stablecoin.

• 🇰🇷 Google Play to ban overseas crypto exchanges from South Korea store.

• 🇰🇷 S. Korean crypto exchanges slam government's proposed ownership cap.

• 🇰🇷 S. Korea approves tokenized securities framework in key legislative hearing.

CASE STUDY

Galaxy Warns Senate Crypto Bill Could Massively Expand Financial Surveillance

State of play: Galaxy Research has raised concerns that a new Senate draft of the crypto market structure bill could significantly expand US financial surveillance powers, potentially marking the largest such expansion since the USA PATRIOT Act.

• According to Galaxy’s head of research, the Senate Banking Committee’s version goes far beyond the House passed Clarity Act in granting new authorities to the US Treasury.

• While the draft includes long sought industry wins, Galaxy argues the tradeoff lies in its approach to illicit finance.

• The bill would give Treasury broad powers to restrict crypto transactions, freeze activity without court orders, extend sanctions and AML rules to DeFi and blockchain front ends, and apply BSA rules to semi decentralized protocols.

• Galaxy notes that, unlike the House’s Clarity Act, the Senate draft explicitly creates new surveillance and enforcement tools for digital assets.

• Politically, the provisions reflect concessions to Democrats on illicit finance, even as Republicans secured core market structure reforms.

• With a Senate Banking Committee vote approaching, the report warns that the bill’s surveillance scope has become a central point of contention that could determine whether broader industry support holds.

Our Take: This is the tradeoff. Clearer rules come with much heavier surveillance. Protecting self custody and devs means less if Treasury can freeze transactions and push AML deep into DeFi.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Raul Carillo’s read on The End of Financial Regulation as We Knew It.

• Chastity Murphy’s read on Inside the Failure to Regulate Stablecoins.

• Ciara Torres-Spelliscy’s read on The Results of the Crypto Bro Elections.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.