Citron Calls Out Coinbase on Crypto Rules: Backs Securitize Instead

[Ben Graham]

Citron Research publicly criticized Coinbase for pulling support from a key US crypto market structure bill and threw its weight behind tokenization firm Securitize. Securitize was in the news late last year after securing a SPAC deal that valued the firm at $1.25Bn.

The market reacted fast. Coinbase (COIN) shares fell about -6.4%, and this spat comes at a sensitive moment, with Washington rewriting crypto rules and Wall Street racing to put real-world assets on blockchains.

(SOURCE: Yahoo Finance)

While crypto-related stocks such as COIN and Robinhood (HOOD) were hit hard by the ongoing dispute, digital assets themselves haven’t been affected just yet.

The crypto market is down 1.5% over the past 24 hours but still holds above $3.3 trillion, with Bitcoin trading above $95,000, suggesting a small, organic pullback likely not tied to the Coinbase/Clarity Act drama.

$COIN $CEPT Watch Brian Armstrong from Coinbase on CNBC to
understand what is he afraid of- Securitize. He is fighting to protect its stablecoin yield revenue while complaining about tokenized equity restrictions

BUT tokenized securities is Securitize's entire business, and…

— Citron Research (@CitronResearch) January 15, 2026

What Just Happened Between Citron and Coinbase?

Citron Research, led by ‘activist short-seller’ Andrew Left, accused Coinbase of opposing the Senate’s draft CLARITY Act out of fear of competition. In simple terms, Citron claims Coinbase wants clear rules, but only if those rules protect its turf.

The CLARITY Act aims to define who regulates what in the crypto space. Think of it like drawing lane lines on a highway so drivers stop crashing. Coinbase says the current draft creates new problems instead of fixing old ones.

Brian Armstrong argues the bill limits tokenized stocks, tightens rules around DeFi, and caps stablecoin rewards. Those rewards matter because they support parts of Coinbase’s business, especially yield products.

Armstrong took to X on January 14 with a long post announcing that Coinbase would be withdrawing support for the CLARITY Act bill and explained in detail the issues he sees with it.

After reviewing the Senate Banking draft text over the last 48hrs, Coinbase unfortunately can’t support the bill as written.

There are too many issues, including:

– A defacto ban on tokenized equities
– DeFi prohibitions, giving the government unlimited access to your financial…

— Brian Armstrong (@brian_armstrong) January 14, 2026

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Securitize’s Regulated Approach Changes the Conversation

Citron’s bet is on Securitize, a firm focused on tokenized securities. That means putting things like funds or bonds on a blockchain, similar to turning a paper stock certificate into a digital token.

Securitize already issued more than $4Bn in tokenized assets. Heavyweights like BlackRock and KKR use its rails. Unlike many crypto startups, Securitize holds both a broker-dealer and a transfer agent license.

That matters because if lawmakers draw harder lines between securities and commodities, regulated players gain ground. Citron sees that as a threat to exchanges built around trading and stablecoin yield.

Very excited to share that @BlackRock’s $BUIDL and @VanEck_US’s $VBILL tokenized fund holders can redeem shares for RLUSD/ETH 24/7 365 through @Securitize, and soon to come RLUSD/XRPL.

Enterprise-grade instant onchain liquidity at your fingertips. That’s real utility.…

— Brad Garlinghouse (@bgarlinghouse) September 23, 2025

Why This Fight Matters for Everyday Crypto Users and the Risk to Investors

Coinbase sits at the front door for new investors entering the US crypto space, being the most accessible and user-friendly platform for those who want to navigate it rather than rely on an ETF.

As a result, when it pushes back on regulation, that affects how safe, simple, and legal your crypto activity feels, as there are fears that Coinbase could be targeted for speaking out against the Trump administration’s CLARITY Act bill.

At the same time, firms like Securitize show where institutional money flows. Tokenization promises 24/7 markets and faster settlement. For users, that means access, but also stricter rules.

This debate also follows a period of softer enforcement. The SEC dropped its long-running lawsuit against Coinbase in early 2025, signaling a shift in tone. Citron profits from strong opinions. Its support for Securitize does not guarantee success. Regulation moves slowly, and bills change.

Tokenization also brings new risks. Smart contracts can fail, and being regulated does not mean risk-free. For beginners, this is not a call to chase stocks or tokens tied to headlines.

If you use US exchanges, focus on basics. Self-custody when possible, and understand how protocols such as staking work before jumping in. These debates between the big firms can shape your options, and won’t offer overnight riches.

As lawmakers keep negotiating, expect more public fights like this. They signal where power and money want crypto to go, and where friction still sits.

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