Clarity Act Aims to Prevent Another FTX in the U.S.

The bill lays out rules for exchanges, brokers, and custody up front, with a focus on separating customer funds and protecting users in bankruptcy after the FTX collapse.

Key Takeaways

• According to the Blockchain Association, the U.S. Clarity Act is meant to close the customer protection gaps that became clear after FTX collapsed.
• The bill is designed to set rules for registration, oversight, custody, segregation of customer funds, disclosure, market integrity, and bankruptcy treatment.
• It also draws a clearer line between the SEC and CFTC and adds measures aimed at money laundering, terrorist financing, and sanctions evasion.

The U.S. Clarity Act, according to the Blockchain Association, is intended to keep the customer protection failures exposed by FTX from happening again. The bill is meant to define market structure, while also setting expectations in advance for how exchanges, brokers, dealers, and custodians handle customer funds, disclosures, and oversight.

Protection Before a Crisis

Summer Mersinger, CEO of the Blockchain Association, says many consumers after FTX’s collapse did not know where their assets were held, whether those assets were separated from company funds, or what would happen if the firm failed. In her view, regulators and bankruptcy courts only got involved after the damage had already been done.

The Clarity Act is meant to break that cycle by putting clear federal rules in place for the firms where consumers buy, sell, and store crypto. In the version now being defended, that includes registration, oversight, custody, segregation of customer funds, market integrity, conflicts of interest, fraud prevention, and bankruptcy treatment.

What the Law Should Cover

Under the proposal, digital asset intermediaries would have to meet capital and risk management standards, keep proper records, and present material information to retail customers in plain language. Firms would also need to monitor markets, guard against deception and manipulation, and follow rules tied to marketing, supervision, and fair pricing.

A major part of the bill deals with what happens if a platform goes under. Customers should know ahead of time whether their assets are kept separate, whether the company can use those funds, and how those assets would be treated in insolvency. The law is also supposed to establish customer asset protection rules for registered firms, so those questions are answered before a bankruptcy case begins, not during it.

The bill also fits into a broader push to draw a cleaner line between the SEC and the CFTC. Introduced in May 2025, the CLARITY Act divides digital assets into digital commodities, investment contracts, and payment stablecoins, with oversight shifting between the CFTC, the SEC, and banking regulators depending on the category. It also includes steps aimed at illegal money flows, including a sanctions framework for central intermediaries and additional tools for law enforcement to fight money laundering, terrorist financing, and sanctions evasion.

Why This Matters for Europe

For European crypto readers, the key point is that the U.S. is trying to build a much tighter framework around exchanges, brokers, and custody through the Clarity Act. That could shape how large international crypto companies design their compliance programs and products, even beyond the U.S. market. It also shows that lawmakers are treating crypto as more than just a trading venue, with customer protection and enforcement built into the system from the start.