Tim Scott is facing a crypto calamity.
Landmark digital asset legislation that the Senate Banking chair hoped to advance out of committee Thursday is in extreme jeopardy after one of the industry’s most influential executives announced his opposition Wednesday, setting off a scramble in the Senate and the White House to rescue the bill.
Scott has now postponed the markup, and it’s unclear where he goes from here.
The last-minute backlash is crypto’s biggest flex yet on Capitol Hill, after the industry’s largest players doled out more than $100 million on races across the country to ensure their allies controlled the 119th Congress.
Scott is facing opposition from Coinbase CEO Brian Armstrong, founder of the largest U.S.-based crypto exchange. Coinbase has one of the most aggressive lobbying and legal operations in the realm of crypto policy, and it has pumped tens of millions of dollars into a pro-crypto super PAC network.
The bill at issue is on its face the kind of thing crypto companies have been working toward for years — a sweeping rewrite of Wall Street regulations to accommodate the trading of crypto tokens. It’s also a top financial policy priority for the Trump administration.
But the legislation isn’t accommodating enough for Coinbase, which had been generally supportive of Scott’s approach until he revealed a new version of the bill this week.
“Evidently, the industry writes the bill and if anybody in Congress has the nerve to slightly amend it, the industry says that the whole thing is off and they have canceled the law,” Massachusetts Sen. Elizabeth Warren, the top Democrat on Senate Banking and an opponent of the bill, told POLITICO. “These are folks who think that when they’ve bought themselves a Congress, then they expect it to behave the way they say.”
Armstrong is balking at what he calls the bill’s “erosion” of authority at the Commodity Futures Trading Commission — a regulator the industry has long preferred over the Securities and Exchange Commission. He’s also concerned about the potential for amendments that would crack down on “rewards” from stablecoins — a flashpoint between crypto firms and traditional banks, which see them as threats to old-school savings accounts.
“We’d rather have no bill than a bad bill,” Armstrong wrote on X — a statement that was also at odds with other big players in the crypto world, who say the bill is flawed but still worth advancing.
Before Armstrong’s surprise rebellion, Scott told POLITICO that he was fully committed to holding the markup, despite looming opposition from key crypto-friendly Democrats and further complications from Republican allies of the banking industry.
“I am hopeful that it will be a bipartisan victory,” Scott said Wednesday around noon. “But at the end of the day, it’s time for us to come and say where we are on the underlying issues.”
But for some Republicans, the outcome was obvious after Armstrong’s power play.
“I think there’s a deal to be had,” Sen. Thom Tillis (R-N.C.) said. “But [Armstrong’s] probably made the right assessment in terms of us being ready for the markup.”
What else we’re watching:
— Approps progress: Senators expect to pass the three-bill appropriations minibus Thursday, and some are confident that another funding package could be released this weekend covering Defense, Transportation-HUD and Labor-HHS-Education. Senate Majority Leader John Thune told POLITICO that senators are keeping their options open for how to process the six remaining funding bills once they return from next week’s recess.
— What’s next on war powers: Sen. Tim Kaine (D-Va.) says Democrats plan to force votes on military action in Greenland, Iran, Colombia, Mexico, Nicaragua and Cuba, after Republicans derailed the Venezuela war powers measure Wednesday. “You make them have to work their ass off to keep their people in the corral,” Kaine told reporters.
Meredith Lee Hill, Jordain Carney and Calen Razor contributed to this report.
