BitGo CEO says Clarity's failure left capital markets exposed to risk potentially worse than Lehman

BitGo (BTGO) CEO Mike Belshe said the U.S. Senate’s failure to advance the Clarity Act has left American capital markets exposed to a structure in which a single firm can combine exchange, brokerage, and custody functions for digital assets.

During an interview with The Block at Korea Blockchain Week 2026, Belshe said BitGo had supported the bill and wanted it passed. The Senate rejected a motion to proceed on the Clarity Act on Sept. 15, failing to win over 60 votes needed to advance the bill.

The BitGo CEO said firms are building one-stop shops that cover trading, brokerage, and custody without the market structure to mitigate risks. He pointed to Coinbase (COIN), which recently received a derivatives clearing organization (DCO) license on top of an existing futures commission merchant (FCM) license and its exchange.

Lehman, only worse

“Exchanges have never held custody, never, of anything,” Belshe said. “And they certainly didn’t hold custody of the world’s most dangerous asset, the bearer asset, the one where if you lose the private key, you lose money.”

At a time when every player is going digital, firms becoming the one-stop shop will be the "preeminent heart" of the market, Belshe said. A custody failure there, he said, would not stop at the firm: “the entire market goes down.”

Regarding counterparty credit risk, Belshe compared the same "one-stop-shop" setup to the 2008 failure of Lehman Brothers, only worse. The broker-dealer failed because it could not see its own exposure, Belshe said, but the financial system survived its collapse.

"Imagine if that had been the New York Stock Exchange offering those services and the whole New York Stock Exchange went down. As devastating as the 2008 crisis was, we survived it. But if it had been New York's stock exchange going down, I don't know if we would have."

Belshe highlighted that the cost of not having clarity is that there is no market structure to mitigate such risks.

"Without solving clarity for really relatively small and petty political differences, the legislature decided to put the American capital markets at risk," Belshe stressed.

The BitGo CEO further said that the firm can operate without the law, as the firm has managed crypto for 13 years with "a target on our back." Banks and other traditional firms, which he described as BitGo’s strongest potential competitors, will move more slowly because they fear a return of Operation Chokepoint 2.0.

AI and stablecoins

Meanwhile, Belshe also shared his views on Maelstrom CIO Arthur Hayes' argument on stage at Korea Blockchain Week that stablecoins and other digital currencies cannot be a native currency for AI agents because they do not convert directly into compute.

"So I wouldn't count that out entirely, but I think it's a little bit far away, and it's not like both of these things can't exist," Belshe said. "You could end up with agents that are paying each other in some sort of value that the agents decide is good, but they're still going to interface to with human system."

The BitGo CEO said he believes humans are going to be controlling AI for much longer than what AI "doomers" are predicting. Humans are going to have agents working for them, and they are going to use a "human-type of interface" based on the dollar or other existing currencies.