Armstrong withdrew support for the Senate crypto bill over tokenized stock bans and stablecoin rules, sending COIN and HOOD tumbling Thursday.
Thursday wasn't great for Coinbase or Robinhood shareholders. Both stocks slid 6–7% after the Senate Banking Committee postponed its markup hearing on the long-awaited crypto market structure bill — hours after Coinbase CEO Brian Armstrong announced the exchange could no longer back the current draft. Armstrong's concerns weren't vague.
He pointed to four deal-breakers: an effective ban on tokenized equities, sweeping DeFi surveillance that gives the government "unlimited access" to financial records, restrictions on stablecoin rewards, and what he called the erosion of CFTC authority in favor of the SEC. For Coinbase, these aren't minor annoyances.
They're existential. Tokenized stocks, stablecoin yields, and DeFi products represent major planks of the company's growth strategy. Blocking them means blocking revenue. Robinhood's Vlad Tenev didn't stay quiet either. He pointed out the absurdity of offering staking and tokenized stocks to European customers while U.S. users are locked out due to "legislative gridlock."
The irony is painful — American companies serving everyone except Americans. What's less obvious is what comes next. Kalshi prediction markets show passage odds dropped from 93% to 49% in recent weeks. The bill needs 60 Senate votes, and if Democrats don't break ranks, it's dead. Bernstein analysts warned that if it doesn't advance by Q2, midterm politics will kill it entirely. Meanwhile, both companies are stuck in the same enforcement-by-lawsuit model they've been fighting for years, only now with less optimism about relief.
