US Lawmaker Sounds Alarm: "More FTX-Style Disasters Inevitable Without Crypto Regulation CLARITY"

Another day, another dire crypto warning from Capitol Hill—but this one might actually matter.

The ticking time bomb no one's defusing

A senior US legislator just dropped this truth bomb: Until Washington gets its act together on crypto rules, expect more exchange meltdowns that make FTX look like a warm-up act. The lack of regulatory clarity isn't just confusing investors—it's practically inviting the next billion-dollar disaster.

Deja vu all over again?

Remember how regulators spent years "studying" crypto while Sam Bankman-Fried was allegedly playing fast and loose with customer funds? Well, grab your popcorn—history's poised to repeat itself. The lawmaker's warning comes as crypto volumes surge back to 2021 levels, with all the same red flags waving.

The trillion-dollar question

Will Congress finally pass meaningful legislation before the next crypto winter? Or will they wait until after the next collapse—when they can grandstand about "protecting investors" while quietly pocketing lobbyist checks? Only in finance do we keep rebuilding houses of cards and acting shocked when they fall.

One thing's certain: In the race between regulators and the next crypto catastrophe, smart money's on disaster.

— Financial Services GOP (@FinancialCmte) July 14, 2025

Another FTX Looms Without Regulations

Hill emphasized that the bill imposes strict consumer and market protections, including a prohibition on co-mingling customer funds. This directly addresses one of FTX’s major failures, where customer deposits were illegally used for other purposes.

There are also capital requirements that ensure firms maintain adequate reserves, record-keeping obligations creating audit trails and transparency, and conflict of interest provisions preventing self-dealing that contributed to FTX’s downfall.

Hill argued that the current system has gaps that leave consumers unprotected.

“For too long, America’s digital assets regime has been delivered in the worst possible world: regulation by enforcement that stifles responsible innovation and an existing commodity and security regulatory framework that’s plagued by gaps that leave consumers unprotected and investors confused.”

Rather than the current regulation by enforcement approach, the bill provides clear definitions of digital commodities and assets, specific disclosure requirements for fundraising, and retail investor protections through “carefully calibrated resale limitations.”

It also gives authority and oversight of centralized exchanges to the Commodities and Futures Trading Commission.

“We are not creating loopholes. We are closing regulatory gaps,” he said.

On Tuesday, July 15, policymakers will begin discussing the bills, and voting will start when the debate ends.

Two More Crypto Bills in Spotlight

In addition to the CLARITY Act, the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act will also be debated and voted on.

This legislation provides a regulatory framework for stablecoins, setting rules for issuers, reserve transparency, and allowing banks to participate.

The House votes on my GENIUS Act this week.

With this bill, we are one step closer to becoming the global leader in crypto.

Let’s get this to @POTUS’s desk ASAP.

— Senator Bill Hagerty (@SenatorHagerty) July 14, 2025

The Anti-CBDC Surveillance State Act, which aims to prevent the Federal Reserve from issuing a central bank digital currency, is also up for debate and a vote this week.

On July 22, Donald Trump’s Digital Asset Task Force is expected to release a report that could include an American strategic Bitcoin reserve, which could also boost crypto market sentiment.