Only the U.S. Senate can prevent the next FTX

Nearly four years have passed since FTX — the crypto exchange run by Sam Bankman-Fried and headquartered in the Bahamas — filed for bankruptcy. In that time Congress has held hearings, the Justice Department has won a conviction for misappropriating customer funds, and creditors have recovered close to $10 billion.

What Congress hasn’t done is establish safeguards that could have prevented or curtailed the fraud sooner.

Congress has been trying for years. The House twice passed market structure legislation that would have given regulators the authority to stop FTX, most recently in July 2025 by a bipartisan vote of 294 to 134. The Senate Banking Committee and Senate Agriculture Committee cleared their own version of the legislation — the Digital Asset Market Clarity Act — earlier this year. It’s about to get its first shot on the Senate floor.

Tomorrow, on September 15, the Senate votes on whether to open debate. If the bill becomes law, exchanges serving U.S. consumers will have to adopt safeguards that FTX lacked. If the bill doesn’t, those gaps will remain.

FTX did not fail because regulators missed a sophisticated scheme. There was nothing sophisticated about it. FTX simply hid that they misappropriated customer assets, because there were no independent custodian, segregated assets, or disclosure requirements. And there was no regulatory oversight ensuring those types of safeguards were followed. The firm collapsed when their fraud was uncovered and customers tried to withdraw their funds, exposing an $8 billion hole.