Key Highlights
- Former CFTC Commissioner Summer Mersinger said the CLARITY Act could address gaps exposed by the FTX collapse.
- The bill would set clearer rules for crypto platforms, including customer asset protection, disclosures, fraud prevention, and custody standards.
- Congress is working to advance the bill, with lawmakers negotiating a possible Senate vote and a House hearing scheduled for July 17.
Former CFTC Commissioner Summer Mersinger called the CLARITY Act one of the most important consumer protection efforts for the U.S. crypto market, saying the bill could help prevent customers from suffering the same problems seen after the collapse of FTX.
“As a former regulator, if there’s one thing I’d encourage people to understand about the Clarity Act, it’s that this is, at its core, a critically important consumer protection bill,” Mersinger said on X.
Why Mersinger backs the CLARITY Act
Mersinger made the comments while explaining why she believes the bill is needed nearly four years after the collapse of FTX, the fraudulent digital asset exchange.
According to her, the exchange’s failure exposed the absence of a clear regulatory framework capable of adequately protecting users of crypto platforms. When FTX collapsed, many customers were left with basic questions about their assets. They did not know where their funds were held, whether customer assets had been segregated from company funds, or what would happen to those assets if the platform failed.
These questions were only addressed after the collapse, leaving regulators, bankruptcy courts, and law enforcement agencies to deal with the damage. Customers were left to face the consequences.
Mersinger said the CLARITY Act would try to put those protections in place before a crisis happens. The bill would create federal rules for centralized crypto platforms, brokers, dealers, and custodians that help people buy, sell, and hold digital assets.
Clearer rules for customer assets
One of the bill’s primary focuses is the treatment of customer assets. Mersinger said customers should know whether their assets are segregated from a company’s own property, whether the company can use those assets, and what happens to them if the company becomes insolvent.
She argued that these rules should be clear before a platform fails, rather than being decided by bankruptcy courts after customers have already lost access to their property.
Better information for everyday crypto users
The CLARITY Act would also require platforms to provide clearer information about technology, governance, trading activity, volatility, incentives, conflicts of interest, and other risks. Mersinger said ordinary consumers should not need to be software developers, lawyers, or bankruptcy experts to understand the basic risks of using a crypto platform.
The bill would also strengthen efforts to fight scams and fraud by placing Bank Secrecy Act obligations on digital commodity exchanges, brokers, and dealers. It would create rules for digital asset kiosks and give firms a clearer path to temporarily slow suspicious transactions when acting in good faith, including at the request of law enforcement.
Mersinger warned that failing to pass the CLARITY Act would leave existing regulatory gaps in place.
“No law can guarantee there will never be another collapse,” Mersinger said, but argued that stronger federal oversight, custody standards, customer asset protections, disclosures, and fraud-prevention tools could reduce the risk of another crisis.
She called on Congress to pass the legislation, saying consumers should not have to wait for another collapse before receiving stronger protections.
Support for the bill keeps growing
The CLARITY Act has continued to gain support from lawmakers and industry participants as Congress works to advance the legislation.
Former U.S. Representative Patrick McHenry, who previously chaired the House Financial Services Committee, has also urged Congress to pass the legislation. He compared the bill to the Telecommunications Act of 1996, which helped create a modern framework for the rapidly changing telecommunications industry.
Congress works toward a possible vote
The legislation is also receiving attention from the White House as lawmakers continue negotiations. A group of senators, led in part by Sen. Bernie Moreno, is expected to brief President Donald Trump on Thursday about the legislation and its path forward.
Moreno said the discussion would cover the entire bill and described Trump as “very engaged” in the legislation. However, disagreements remain, including ethics concerns linked to Trump’s own crypto interests.
Lawmakers are working to determine whether negotiations have progressed enough to produce a revised version of the bill and move it toward a Senate vote before the August 7 recess.
Meanwhile, the House is also set to hold a major hearing on the legislation on July 17. The House Financial Services Committee’s Digital Assets Subcommittee will hold its first dedicated field hearing on the CLARITY Act in New York City.
The hearing, titled “Building the Future of Finance: How the CLARITY Act Unlocks Innovation,” will be chaired by Rep. French Hill. Lawmakers are expected to hear from exchanges, banks, asset managers, and custodians about how clearer crypto regulations could affect the industry and future digital asset innovation.
Also Read: US Senate Unanimously Opposes Presidential Pardon for FTX’s Sam Bankman-Fried
