Despite the collapse of FTX, elements governed by law endured. As traditional finance increasingly intersects with digital assets, the failure of the Senate to pass the CLARITY Act raises concerns, argues Randi Abernethy of Bullish.
By Randi Abernethy, Tram Doman|Edited by Cheyenne LigonUpdated Aug 7, 2026, 2:37 p.m. Published Aug 7, 2026, 2:30 p.m. 4 min readMake preferred on ShareShare this articleCopy linkX (Twitter)LinkedInFacebookEmailMake preferred on U.S. Capitol Building (Getty Images/aire images)During the Senate's inaction on the CLARITY Act, major players in U.S. finance continued to explore blockchain applications. JPMorgan advanced its tokenization efforts with ETF holdings through a pilot program by the Depository Trust & Clearing Corporation (DTCC), while over 50 firms, including BlackRock and Goldman Sachs, committed to tokenizing stocks and Treasuries via the same system. BlackRock's CEO described tokenization as a method to "update the plumbing of the financial system." The debate in Congress has shifted focus away from crypto.
For those in traditional finance who view the CLARITY Act as merely a digital asset issue, it is worth recalling the events of 2008. A rapid emergence of an untested financial instrument within the regulated framework led to widespread losses that affected firms with no direct ties to subprime mortgages, erasing approximately $17 trillion in household wealth.
Randi Abernethy is the Head of Clearing and Group Risk at Bullish Exchange. She provided testimony regarding the CLARITY Act before a House Financial Services subcommittee in July 2026. Read her full congressional testimony here.
The key point is not that tokenized assets will replicate the subprime crisis; rather, it is that disruptions can propagate through interconnected systems regardless of direct involvement. The current landscape remains unchanged: stablecoins alone hold over $100 billion in Treasury bills. Should a major stablecoin falter and trigger a sell-off, the repercussions would impact the funding markets that traditional desks rely on daily. Federal Reserve analysts have identified this risk; a near miss occurred in 2023 when Circle's USDC temporarily lost its peg due to reserves being held in a failing bank. Global organizations like the IMF caution that any similar event could spread more swiftly than in 2008, given the volatility of these markets and the absence of clearing requirements to contain defaults. As the financial landscape is being restructured under unlegislated rules, the next crisis could lead to significant losses without regard for whether a firm has adopted on-chain solutions.
The proposed legislation enjoys support from a broad coalition beyond the crypto sector: Fidelity, Goldman Sachs, and Franklin Templeton have all advocated for its passage, contending that clear regulations would safeguard investors. However, critics argue that the proposed regulations are insufficiently stringent, a concern that warrants consideration. The CLARITY Act aims to establish a comprehensive legal framework for investor protection at the federal level, ensuring oversight by federal agencies, implementing vital safeguards such as customer asset segregation, conflict of interest management, capital adequacy, and transparency, while delegating specific rulemaking to regulatory bodies, similar to how Dodd-Frank established a foundational structure that was elaborated upon over time. The Senate's recent inaction leaves the critical question of whether to enact any of these protections unanswered, and time constraints loom: a narrow window in September followed by an election year.
Consequently, the current protections remain inadequate: at the federal level, they exist as an interpretive notice categorizing 16 tokens, a collateral pilot program, a few no-action letters, and a memorandum of understanding between federal agencies, all of which can be revoked without a formal vote. Investors face varying levels of protection across states, with some states providing robust safeguards while others offer minimal or no protections, resulting in a fragmented national market. The previous significant market collapse demonstrated the limitations of existing protections.
When FTX failed, its offshore exchange misappropriated customer assets for years. However, several entities within the FTX group, including LedgerX, a CFTC-regulated exchange and clearinghouse, emerged from the crisis intact, with customer assets properly segregated. LedgerX's survival was attributable to its legal protections. It was not a complex mechanism but a straightforward requirement for customer asset segregation enforced by regulators, which remained effective even amid panic. The unregulated segments of FTX operated on trust. In one instance of collapse, the legal framework prevailed while promises failed.
FTX's offshore status was intentional. For years, the U.S. approached this industry with enforcement rather than clear regulations, leading to a migration of capital and talent to regions with clearer rules, such as Europe, Asia, and the Gulf. This created a vacuum that exchanges like FTX exploited. As Washington began to provide clarity, firms returned to the U.S.: Nexo re-entered after a long absence, London-based Wintermute opened a New York office, and Switzerland's Taurus established a presence in New York to cater to banking clients. Legal frameworks protect what they can encompass, and the CLARITY Act would solidify this trend, preventing future firms from opting for less regulated environments. It would establish the regulated onshore model as the standard for firms like Bullish, which is already regulated in major financial centers such as Frankfurt, Hong Kong, and New York, and is currently seeking CFTC registration as a designated contract market and derivatives clearing organization.
The distinction between a systemic failure that the financial system can absorb and one that it cannot hinges on the principle already established by LedgerX: federal law prevails; promises do not. The CLARITY Act would enshrine this principle into law before the next crisis materializes. Every large-scale system ultimately faces a test of its robustness, and only those founded on legal principles will endure.
Note: The views expressed in this column are those of the author and do not necessarily reflect those of CoinDesk, Inc. or its owners and affiliates.
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Building the Zcash Machine: Tachyon and Quantum Readiness
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Zcash’s Tachyon upgrade aims to scale shielded payments, improve quantum readiness, and test whether its funding, security, and governance can hold.
By CoinDesk ResearchJun 30, 2026Commissioned byGenZcashZcash’s Tachyon upgrade aims to scale shielded payments, improve quantum readiness, and test whether its funding, security, and governance can hold.
Why it matters:
Zcash’s Tachyon upgrade aims to scale shielded payments, improve quantum readiness, and test whether its funding, security, and governance can hold.
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