White House Threatens to Kill Crypto Bill After Coinbase ‘Rug Pull’
Trump administration officials accuse Coinbase of a ‘rug pull’ after Brian Armstrong walks away from legislation over stablecoin yield caps.
The Trump administration has issued a blunt ultimatum to Coinbase: return to the negotiating table or watch the Digital Asset Market Clarity Act die. The White House is reportedly prepared to withdraw all support for the landmark market structure legislation after Coinbase CEO Brian Armstrong walked away from talks 48 hours before a scheduled Senate markup.
The ‘Rug Pull’ Accusation
Negotiations collapsed over stablecoin yields. Armstrong refused to accept provisions that would cap the interest users can earn on stablecoins, a concession demanded by banking lobbyists who view 5% yields on dollar-backed tokens as an existential threat to low-interest deposit accounts. Coinbase’s sudden exit forced the Senate Banking Committee to postpone its vote, originally set for January 15.
Administration officials were blindsided. According to Fox Business reporter Eleanor Terrett, the White House characterized the move as a "unilateral" decision and a "rug pull" on both the administration and the wider industry.
"This is President Trump’s bill at the end of the day, not Brian Armstrong’s," a source close to the administration stated.
Banks vs. Builders
The friction centers on revenue. Armstrong argued the current draft creates a "de facto ban" on tokenized equities and hands the government unlimited access to DeFi protocols. But the red line remains the yield cap. Banks argue that allowing non-bank issuers to offer high yields without FDIC insurance creates systemic risk. Armstrong counters that this is simply regulatory capture designed to protect bank profit margins.
Market Reaction & Outlook
The political standoff left markets jittery but intact. Bitcoin ($BTC) held the $96,000 level over the weekend, while Coinbase ($COIN) closed the week near $236, down from monthly highs. The delay is tangible: the Senate Banking Committee markup is now unlikely to occur until February or March, pushing the regulatory clarity the industry has demanded for a decade further out of reach.
