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Crypto Regulation

BitGo CEO: Clarity’s Failure Poses Systemic Risk Potentially Worse Than Lehman

BitGo CEO Mike Belshe warned that Clarity’s failure left capital markets exposed to systemic risk potentially worse than Lehman, pointing to the concentration of exchange, brokerage and custody functions inside a single firm. Belshe said the collapse shows how intertwined those roles become when one company controls them all.

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AI take

Belshe's point is structural rather than reputational: the danger he identifies comes from bundling exchange, brokerage and custody in one entity, not from any single balance sheet. That reframes the debate away from firm-level solvency toward market plumbing, where a failure can transmit through functions rather than counterparties. The open question is whether regulators and market participants treat that concentration as a distinct risk category, or continue to assess it through the lens of the entities involved.

Generated by AI for reference only.

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