a16z Warns: If the Senate Fails to Pass the CLARITY Act, the Next 'FTX Crisis' Could Be Even More Severe

BlockBeats news, September 14: Miles Jennings, head of crypto policy at a16z, posted that nearly 4 years after the FTX collapse, the U.S. Congress still has not established a complete regulatory framework sufficient to prevent similar fraud from happening again. He called on the Senate to advance the CLARITY Act and warned that if the status quo continues, the next major crypto market risk could cause an even greater shock.

Jennings argued that FTX's failure did not stem from complex financial innovation, but from the misappropriation of customer assets and the lack of basic safeguards such as independent custody, asset segregation, information disclosure, and regulatory review. The CLARITY Act would bring digital asset brokers, dealers, and exchanges under regulation, introducing regulatory mechanisms already common in traditional financial markets, including segregation of customer assets, qualified custody, restrictions on related-party conflicts of interest, mandatory disclosure, listing standards, and limits on insider selling.

Regarding outside characterizations of the CLARITY Act as "crypto industry deregulation," Jennings argued that current U.S. law itself cannot clearly define the regulatory status of a large number of digital assets, and that this regulatory gap has instead provided space for offshore exchanges like FTX. He also rebutted objections concerning crypto industry ethics and stablecoin yields, saying the latest bill already restricts passive stablecoin yields and allows the Treasury Department to take further measures if there is evidence of deposit outflows.

Jennings emphasized that stablecoin supply has exceeded $300 billion, and the scale of tokenized assets has also exceeded $30 billion, with major financial institutions such as BlackRock, Fidelity, Franklin Templeton, and Goldman Sachs all having entered digital assets. He said the digital asset market is no longer a marginal part of the financial system, and the United States needs to establish long-term stable regulatory rules through legislation rather than relying on administrative agencies to constantly adjust policy as governments change. The Senate will vote on September 15 on whether to begin consideration of the CLARITY Act, and "if we do not act now, the next crisis could be even bigger."