Miles Jennings, head of crypto policy at a16z, stated that nearly four years have passed since the FTX collapse, yet Congress has not established a comprehensive regulatory framework to prevent similar frauds. He urged the Senate to advance the CLARITY Act, warning that "if we don't act now, the next crisis could be even bigger."

Jennings believes that the FTX collapse was not due to complex financial innovations, but rather the misappropriation of customer assets and the lack of basic safeguards such as independent custody, asset segregation, information disclosure, and regulatory oversight. Public records show that FTX founder Sam Bankman-Fried secretly transferred billions of dollars of customer funds to the affiliated market maker Alameda Research through a hidden "backdoor credit line," ultimately leading to a bank run and bankruptcy in November 2022, with Bankman-Fried later convicted of fraud.

Jennings stated that the CLARITY Act would formally bring digital asset brokers, dealers, and exchanges under regulatory oversight, introducing mechanisms such as customer asset segregation, qualified custody, restrictions on conflicts of interest, mandatory disclosures, listing standards, and insider sale restrictions, which already exist in traditional financial markets. He likened this to the crypto industry's "1933 moment"—emulating the Securities Act and Securities Exchange Act established during the Great Depression to set foundational rules for public markets, replacing the previous model of "enforcement replacing regulation" with "codified legislation."

In response to criticisms labeling the CLARITY Act as a "relaxation of regulation for the crypto industry," Jennings countered that existing U.S. laws fail to clearly define the regulatory attributes of many digital assets, and this regulatory gap has provided operational space for offshore exchanges like FTX. He also addressed controversial provisions regarding stablecoin yields, stating that the latest bill text has restricted passive stablecoin yields and allows the Treasury to take further action if evidence of deposit outflows arises.

Opposition from the banking sector is also clear—six major banking groups, including the American Bankers Association and the Bank Policy Institute, oppose the stablecoin yield provisions in the bill, fearing that such "interest-like" yields could divert bank deposits and impact local credit for small businesses, mortgages, and agricultural loans. Jennings responded that regardless of whether the bill passes, crypto intermediaries will continue to pay yields to stablecoin holders under the current GENIUS Act framework, and banks' resistance "will not punish anyone for maintaining the status quo," but cannot truly stop this trend.

Jennings emphasized that the current supply of stablecoins has exceeded $300 billion, and the scale of tokenized assets has surpassed $30 billion, with major financial institutions like BlackRock, Fidelity, Franklin Templeton, and Goldman Sachs already entering the digital asset space (e.g., BlackRock's tokenized money market fund BUIDL). He believes that the digital asset market is no longer a fringe market in the financial system, and the U.S. needs to establish long-term stable rules through legislation rather than relying on administrative policies that change with government transitions. The Senate will vote on whether to initiate deliberations on the CLARITY Act on September 15.

Source: Public Information