Bullish Executive Urges CLARITY Act Progress: Why FTX Still Defines the Case for Digital Asset Regulation

The debate over U.S. crypto regulation is no longer a niche policy fight inside the digital asset industry. As banks, asset managers, clearing houses, and market infrastructure providers move deeper into tokenization, the question is becoming much bigger: what rules should govern the next generation of financial rails?

Randi Abernethy, Head of Clearing and Group Risk at Bullish, recently argued that the U.S. Senate’s failure to advance the Digital Asset Market Clarity Act, widely known as the CLARITY Act, should not be read as a sign that digital asset markets are slowing down. Instead, it highlights the urgency of creating a coherent federal framework for crypto markets, especially after the lessons of FTX.

Her point is timely. The crypto market has matured far beyond speculative trading. Stablecoins are now a major source of demand for short-term U.S. government debt, tokenized funds are attracting global financial institutions, and public blockchains are increasingly discussed as settlement infrastructure. Without clear laws, the next market failure may not stay contained within crypto.

The CLARITY Act Is About Market Structure, Not Just Crypto

At its core, the CLARITY Act is designed to define how digital assets should be regulated in the United States. The bill attempts to clarify the responsibilities of agencies such as the Commodity Futures Trading Commission and the Securities and Exchange Commission, while introducing rules around exchanges, brokers, dealers, custody, disclosures, and customer protection.

For years, U.S. crypto companies have operated under a fragmented regulatory environment. Some assets are treated as securities, others as commodities, and many fall into uncertain territory depending on how they are issued, traded, or used. This ambiguity creates risks for both companies and users.

A federal market structure bill would not eliminate risk. But it could reduce the most dangerous forms of uncertainty by establishing baseline expectations for:

• Customer asset segregation
• Conflict-of-interest controls
• Capital and liquidity requirements
• Transparent market disclosures
• Registration pathways for digital asset intermediaries
• Clearer jurisdiction between federal regulators

The text and status of the bill can be tracked through the official U.S. Congress page for the Digital Asset Market Clarity Act of 2025.

Why FTX Remains the Central Warning

The collapse of FTX was not simply a story about poor governance at one exchange. It exposed a deeper structural problem: when trading venues, affiliated market makers, custody functions, and customer assets are not clearly separated, users can face catastrophic losses before they even understand where the risk sits.

The criminal proceedings and bankruptcy process showed how quickly confidence can disappear when customers discover that the platform they trusted did not operate with the safeguards expected in mature financial markets. The U.S. Department of Justice has published official materials related to the case, including its announcement following the sentencing of Samuel Bankman-Fried.

This is why the FTX lesson continues to matter in 2025. Crypto markets have grown, but many users still interact with digital assets through centralized platforms. If those platforms combine exchange, lending, custody, market making, and proprietary trading under weak oversight, the same failure modes can reappear.

The CLARITY Act debate therefore goes beyond whether crypto should be encouraged or restricted. It is about whether digital asset businesses should be required to follow rules that prevent customer funds from being misused, reduce hidden leverage, and make operational risks visible before a crisis.

Traditional Finance Is Already Moving On-Chain

Abernethy’s broader argument is that policymakers are debating crypto market structure at the same time traditional finance is actively building with blockchain-based systems.

This is no longer theoretical. Major financial institutions are exploring tokenized representations of funds, equities, bonds, collateral, and money market instruments. The Depository Trust & Clearing Corporation has also been researching how tokenization may affect post-trade infrastructure and capital markets operations, including through its work on digital assets and tokenized market infrastructure.

The participation of large institutions changes the policy discussion. Tokenization is not merely about issuing assets on-chain. It can affect settlement speed, collateral mobility, transparency, liquidity management, and the structure of financial intermediation.

If tokenized ETFs, tokenized Treasuries, and on-chain settlement systems become part of mainstream finance, then digital asset regulation becomes a systemic infrastructure issue. The question is no longer “How should crypto companies be regulated?” It becomes “How should financial markets operate when assets, collateral, and settlement increasingly move across programmable networks?”

Stablecoins Create a Bridge Between Crypto and Treasury Markets

Stablecoins are one of the clearest examples of crypto’s connection to the traditional financial system.

The largest fiat-backed stablecoins generally hold reserves in cash, bank deposits, short-term U.S. Treasuries, reverse repos, or similar liquid instruments. This means the stablecoin sector is not isolated from the conventional financial system. It is already linked to government debt markets and dollar liquidity.

According to market data providers such as CoinGecko’s stablecoin market overview, the total value of stablecoins remains well above the hundred-billion-dollar level. That scale matters. If a major stablecoin were to experience a rapid loss of confidence, forced reserve liquidations or redemption pressure could potentially transmit stress into short-term funding markets.

This is why policymakers have placed stablecoins near the center of the digital asset regulation debate. The Federal Reserve has repeatedly discussed the implications of stablecoins for payments, financial stability, and bank-like activities, including in its Financial Stability Reports.

In other words, the regulatory gap is not just about protecting crypto traders. It is also about preventing stress in digital asset markets from spilling into the wider financial system.

The 2008 Analogy: Shared Infrastructure Spreads Risk

Abernethy’s comparison to the 2008 financial crisis is important because it focuses on infrastructure.

Before 2008, many institutions believed they were only indirectly exposed to risky mortgage-linked products. But once the crisis unfolded, losses spread through funding markets, derivatives, collateral chains, and confidence channels. The lesson was that institutions can be exposed to a market even when they do not directly hold the asset at the center of the crisis.

A similar dynamic could emerge in digital assets as tokenization expands. A bank may not run a crypto exchange. An asset manager may not issue a stablecoin. A clearing institution may not hold volatile tokens. Yet all of them could still rely on shared settlement systems, tokenized collateral networks, or liquidity channels connected to digital asset infrastructure.

This is the key regulatory challenge: the more crypto and traditional finance converge, the less useful it becomes to treat them as separate worlds.

What Good Regulation Should Preserve

A common concern in the crypto industry is that regulation could suppress innovation. That risk is real if rules are poorly designed. However, the absence of rules can also damage innovation by making serious institutions hesitant to participate and leaving users exposed to avoidable failures.

A balanced framework should preserve the core advantages of blockchain technology:

• Open settlement networks
• Programmable assets
• Faster collateral movement
• Transparent on-chain records
• Global access to digital markets
• User-controlled custody options

At the same time, it should address the weaknesses that have repeatedly harmed users:

• Commingling of customer and corporate assets
• Hidden leverage
• Poor disclosure
• Conflicted exchange structures
• Weak custody practices
• Unclear bankruptcy treatment

The best version of crypto regulation would not force every digital asset into an outdated category. Instead, it would create rules that match the actual function of the activity: issuance, trading, custody, clearing, lending, payments, or settlement.

Why Self-Custody Still Matters

Even with better laws, users should not outsource all responsibility for asset security. Regulation can reduce platform risk, but it cannot eliminate counterparty risk. FTX demonstrated that users who keep assets on centralized platforms may become unsecured creditors if the platform fails.

This is where self-custody remains a foundational principle of crypto. Holding private keys directly allows users to separate asset ownership from exchange solvency. It does not remove market volatility, smart contract risk, or transaction risk, but it gives users stronger control over access to their funds.

For long-term holders, active DeFi users, and investors interacting with multiple blockchain ecosystems, a hardware wallet can be an important part of risk management. OneKey is built around offline private key protection, transparent transaction signing, and multi-chain asset management, making it relevant in a market where custody standards are becoming just as important as market structure rules.

The Road Ahead: Regulation and User Protection Will Advance Together

The Senate’s delay on the CLARITY Act does not stop the development of digital asset markets. Banks will continue exploring tokenization. Asset managers will keep testing blockchain settlement. Stablecoins will remain a major part of crypto liquidity. Developers will continue building applications that move value on-chain.

But the longer the U.S. waits to define the rules, the more market structure risk accumulates.

The FTX collapse made one lesson impossible to ignore: digital assets need both technological security and institutional accountability. Clear regulation can help address the institutional side by setting standards for platforms, disclosures, custody, and conflicts of interest. Self-custody helps address the user side by giving individuals direct control over their assets.

As crypto becomes part of the broader financial system, both will matter. The future of digital assets will not be shaped only by code or legislation. It will be shaped by whether market infrastructure can earn trust at scale.