BitGo Chief Executive Mike Belshe warned that the U.S. Senate’s failure to advance the Clarity Act could leave digital-asset markets without safeguards against firms combining exchange, brokerage and custody services under one corporate structure.
Speaking during Korea Blockchain Week 2026, Belshe said the Senate’s Sept. 15 vote preserved a market setup in which a major platform can facilitate trading, act as an intermediary and hold customer assets simultaneously. The motion to proceed reportedly failed to clear the 60-vote threshold required to move the legislation forward.
Belshe focused on two exposures created by that arrangement: the risk that customer assets are lost or trapped in a custody failure, and the risk that a firm’s own credit problems spread through the services it operates.
“The Clarity Act,” as discussed in Washington, is intended to establish a more defined federal framework for digital-asset market structure. Its stalled progress leaves unresolved questions over which rules should govern platforms that perform roles traditionally separated across exchanges, brokers, clearing entities and custodians.
Belshe points to concentrated platform roles
Belshe said crypto companies have increasingly built “one-stop shops” that bring together services usually kept separate in conventional financial markets. He cited Coinbase as an example of a firm operating an exchange while also holding futures commission merchant status and recently obtaining a derivatives clearing organization license.
That combination can make a platform more convenient for customers, who can trade, settle and store assets in one place. Belshe’s concern is that convenience also concentrates operational and financial dependencies within the same company. A disruption in one part of the business could affect access to trading, collateral, settlement and asset withdrawals at once.
Traditional securities markets use different entities for many of these functions, partly to limit the damage if one institution encounters distress. Belshe argued that the absence of a comparable digital-asset market structure leaves customers exposed to a platform’s internal controls and balance sheet across several services.
He said the legislative deadlock reflects political disagreement over how crypto markets should be regulated, rather than a settled approach to handling the risks associated with consolidated platforms.
Custody creates a distinct risk for bearer assets
Belshe described custody as a particularly sensitive issue for digital assets because control of private keys generally determines control of the assets. If a custodian loses keys, suffers a breach or cannot process withdrawals, customers may face a direct loss of access to their holdings.
In traditional markets, Belshe said, exchanges have generally not held customer assets in the same way that a consolidated crypto platform can. That separation can reduce the chance that an exchange’s operational failure also becomes a customer custody crisis.
A custody breakdown at a central venue could also create effects beyond the affected company, Belshe said. Customers unable to access collateral or move holdings may be unable to settle obligations elsewhere, while market makers could pull back if they cannot reliably transfer assets between venues.
The issue has become more relevant as institutions increase their use of regulated custodians and as trading firms rely on rapid movement of collateral. A market structure that places execution and custody under one roof can reduce transfer friction in normal conditions, but it may also make the same operator a single point of failure during stress.
Credit exposure could spread through bundled services
Belshe compared the counterparty-credit element of the model to the failure of Lehman Brothers in 2008. He said Lehman collapsed in part because it could not fully assess its own exposure, while the broader financial system, despite severe disruption, continued operating after the firm’s bankruptcy.
His argument was that a large digital-asset platform could pose a different operational challenge if it performs several core functions. Customers and counterparties could depend on the company not only for credit and trade execution, but also for asset custody and post-trade processes.
A failure at such a platform would not automatically produce a systemic market event. Its impact would depend on the firm’s size, customer concentration, legal structure, asset segregation practices and links to other financial institutions. Yet Belshe said the combined model can make it harder to isolate a problem once a platform is under pressure.
The Clarity Act’s failure to advance does not change the rules currently governing individual firms. It does, though, prolong the policy fight over whether U.S. law should impose clearer functional separations, capital requirements or custody standards on platforms offering multiple services.
Banks may remain cautious without legislation
Belshe said BitGo has operated for 13 years without the proposed law, suggesting established crypto service providers have continued building under the existing patchwork of federal and state oversight. He added that banks and traditional financial firms may be more hesitant to compete directly while they worry about a possible return of “Operation Chokepoint 2.0,” a term used by parts of the crypto sector to describe perceived pressure on banks serving digital-asset businesses.
That caution could slow the entry of firms with established compliance operations, balance sheets and custody infrastructure. It also leaves existing crypto-native platforms with a larger role in providing essential market services while Congress remains divided.
AI payment use remains a longer-term question
Belshe also responded to comments from Maelstrom Chief Investment Officer Arthur Hayes, who discussed stablecoins and other digital currencies as payment tools for AI agents.
Belshe said the practical issue is whether a digital currency can convert directly into computing resources. That remains a longer-term question, he said, rather than a near-term replacement for the financial systems used by people and businesses.
He expects humans to retain control over AI systems for longer than some forecasts suggest, with agents operating on behalf of users rather than independently replacing them. Those agents would still need to connect with human financial infrastructure, including dollar-based payment systems and other existing currencies.
That view places the immediate policy debate back on market plumbing: who holds assets, who executes trades, who bears losses when a platform fails, and whether the rules governing those roles are clear before digital-asset services become more deeply integrated with automated financial tools.
Concerned about market-structure risk and regulation? Explore how XRP’s Clarity Act shapes crypto’s evolving regulatory landscape.
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