Coinbase Under Fire: White House Fury Erupts Over Latest Move

Recently, Citron Research also criticized Coinbase, sparking a heated debate within the cryptocurrency community.

Noted journalist Eleanor Terrett reported that the Trump administration is considering withdrawing its support for the cryptocurrency market structure bill if Coinbase doesn’t return to negotiations, highlighting the ongoing struggle for regulatory clarity in the crypto space.

Coinbase and its CEO blamed banks for intervening and pushing for changes that limit users from earning yields on stablecoins, a key aspect of decentralized finance (DeFi). However, industry experts have expressed disagreement, citing concerns over the potential impact on the broader crypto market.

White House Threatens to Pull Support

Terrett cited a source close to the Trump administration, stating that the White House expects Coinbase to return with a more suitable agreement that addresses the concerns of banks and satisfies all parties involved, ultimately aiming to promote a more cohesive crypto market structure.

She explained that the administration is “said to be furious” with Coinbase’s “unilateral” decision, which reportedly caught them off guard, and has been described as a “rug pull” against the White House and the crypto industry as a whole, raising questions about the future of cryptocurrency regulation.

SCOOP: The White House is considering pulling its support for the crypto market structure bill entirely if @coinbase does not come back to the table with a yield agreement that satisfies the banks and gets everyone to a deal, a source close to the Trump administration tells me.…

— Eleanor Terrett (@EleanorTerrett) January 17, 2026

The source further emphasized that this is “President Trump’s bill at the end of the day, not Brian Armstrong’s,” highlighting the political dynamics at play in shaping the future of crypto regulation and the cryptocurrency market.

Recall that Coinbase pulled its support earlier this week after citing issues with the current draft, including a de facto ban on tokenized equities, DeFi prohibitions that could compromise user privacy, erosion of the CFTC’s authority, and draft amendments that would effectively kill rewards on stablecoins, allowing banks to stifle competition in the crypto space.

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– A potential ban on tokenized equities, which could limit investment opportunities in the crypto market

– Prohibitions on DeFi, which could give the government unlimited access to financial records and undermine user privacy, a key concern for crypto enthusiasts

– Erosion of the CFTC’s authority, which could stifle innovation in the crypto industry and make it subservient to the SEC, potentially hindering the growth of cryptocurrency and blockchain technology

– Draft amendments that would kill rewards on stablecoins, allowing banks to ban their competition and maintain control over the financial system, a move that could have significant implications for the future of cryptocurrency and decentralized finance

Undermining the Bill?

Coinbase’s decision has sparked controversy both within and outside the cryptocurrency industry, with some experts, such as Ripple’s Brad Garlinghouse, taking a neutral stance, while others, like Citron Research, have directly accused CEO Brian Armstrong of undermining the bill and the broader crypto market structure.

They argue that Coinbase’s official reasoning reveals a fear of competition from tokenized securities firms, as the company seeks to benefit from regulatory clarity without opening the door to rivals, potentially limiting innovation and growth in the crypto space.

The Senate Banking Committee postponed its scheduled markup of the bill on January 15, and no new date has been set yet, leaving the future of cryptocurrency regulation and the crypto market structure bill uncertain.