January was going to be a landmark month for the crypto industry. The Senate would start negotiating the finer details of the CLARITY Act, a major law that would finally enshrine the fundamental structure of how the crypto market could legally operate in the United States: what digital assets counted as a security versus a commodity, what regulatory responsibilities companies had to abide by, what legal protections consumers could have. The House had already passed their version months ago. The White House was ready to sign it. Democrats and Republicans seemed to agree on the bill’s fundamentals.

And crypto, which had spent decades navigating a regulatory gray zone, would finally have a set of rules to work off of — maybe not perfect rules, but hard rules. “[We] don’t want to be in a place where, with the change of every administration, what you can and can’t do with software, or what you can and can’t publish, changes,” Connor Brown, the Head of Strategy for the Bitcoin Policy Institute, told The Verge.

Last Wednesday, just before midnight, everything fell apart.

Hours before the Senate Banking Committee would have convened for markup on Thursday — the period where a group of Republicans and Democrats would negotiate over every single word, clause, and amendment in the hundred-plus draft, to prepare it for a final Senate vote — Coinbase, the world’s biggest crypto exchange, announced that having reviewed the final draft of the bill, they were withdrawing their support for the CLARITY Act altogether.

“We’d rather have no bill than a bad bill,” CEO Brian Armstrong said on X, and later pinned the blame on a third party: the big banks, whose lobbyists had swooped in at the last minute to curb the threat of customers storing their money in crypto wallets instead of savings accounts.

Armstrong had several specific objections, but one hill Coinbase seems prepared to die on: whether crypto owners would be able to earn interest or other rewards off of holding stablecoins, a token whose price was pegged to the value of the US dollar, in the way that consumers could earn interest from money deposited in traditional bank accounts. (Coinbase did not return a request for comment.)

Banking committee chairman Tim Scott (R-SC) immediately cancelled the markup, just a “brief pause” to renegotiate. Lobbyists began calling around and analysts began dissecting the draft. But notably, the vast majority of crypto’s biggest players, from exchanges to investors, publicly announced that they would support the Senate bill, and implicitly bashed Coinbase for derailing its passage.

“Reasonable people can disagree on specific provisions. That is precisely why the final stage of this process matters,” Kraken CEO Arjun Sethi said on Thursday, reaffirming his support of the CLARITY Act. “The right response to outstanding issues is to resolve them not to abandon years of bipartisan progress and start over from scratch.” His sentiment was shared by a16z managing partner Chris Dixon, Ripple CEO Brad Garlinghouse, and even David Sacks, the powerful White House special advisor on AI and Crypto, who urged Coinbase to “resolve any remaining differences” before the end of the month.

While the rest of the industry is willing to deal with the problems Armstrong pointed out in exchange for having a law, Coinbase — a publicly-traded company that offers yield-bearing stablecoin accounts — would suffer the most if the interest issue remains intact. But there is a real deadline to lock in any sort of meaningful crypto legislation, and it starts the moment that members of Congress begin running for re-election.

Midterm elections are generally guaranteed to kill any incentive for bipartisan consensus, but especially so in this cycle, where elected officials will have to face furious constituents who might see support of CLARITY as a proxy for supporting Trump. It doesn’t help that the Senate Republicans are trying to box out a Democrat-written provision that would prevent Trump from profiting off of crypto assets. Campaigns start in March, and the Senate is not in session next week, giving them less than a month to hammer out any issues before switching to campaign mode.

That is an exceedingly short amount of time for the Banking Committee to renegotiate new language, mark up that bill, send it to the Senate Agriculture Committee (which is responsible for regulating commodities), and negotiate even further before it even hits the Senate floor for a full vote. And “floor time” — when the Senate can summon all 100 members to vote for a bill in person — is an increasingly rare commodity before the election season. (Most of it will likely be burned on averting yet another government shutdown.)

Punting the bill to next year isn’t a safe option, either. It’s widely expected that the Republicans will lose either the House or the Senate, giving Democrats the means to block CLARITY’s passage for whatever reason they cite. And while the current president might be a steadfast ally to the crypto industry, there’s no telling who will come after him, much less how they’d feel about crypto.

“Will we ever have a setup as favorable as we do right now? Hard to imagine,” Seth Hertlein, the global head of policy at Ledger. “Could it happen? Sure, maybe, nobody knows. But there’s definitely a sense that if we don’t get it done now, either it’s not going to happen, or it will happen on much less favorable terms.”

In the meantime, however, DC policymakers are frustrated that Coinbase reopened a debate that had seemingly been settled last year: the House had already spent years writing and negotiating a crypto market structure bill, which passed last August with an overwhelmingly bipartisan vote. In the defense of Coinbase, the Senate’s version now had to contend with the demands of the finance industry, which had not initially weighed in on crypto market structure until late last year, as well as the progressive Democrat Senators on the committee. And, of course, the Senate had insisted on writing its own version of the bill instead of working off the House’s version.

“The Senate is where House bills go to die,” said Hertlein. “That’s a common Washington bubble joke.”