OPINION: Crypto Wants to Play by Different Rules. Retail Investors Will Pay the Price

By Sean Corkery

One of the first things I did when I turned 18 was open a brokerage account and buy my first stock. The rules were clear, the broker had to be registered with FINRA, material risks had to be disclosed in the prospectus, and fraud carried real legal consequences. These aren't bureaucratic hurdles, they are the bedrock of a system that made American capital markets the deepest and most trusted in the world. Now Congress is considering legislation that would exempt an entire asset class from those same protections, and the consequences could be severe.

The Senate is weighing market structure legislation for digital assets that would carve out broad exemptions for crypto interests from the investor safeguards that govern every other corner of American finance. Before lawmakers vote, they should ask a straightforward question: why should a retail investor buying a crypto token have fewer protections than one buying a share of stock?

Consider what those safeguards actually do. The Securities Exchange Act of 1934 was passed in the wake of the Great Depression, after millions of ordinary Americans lost their savings overnight. It established a straightforward set of rules: companies must be honest about what they're selling, markets must be fair, and people who cheat investors must face consequences. The Dodd-Frank Act of 2010 came out of the 2008 housing crash, when risky financial products brought the entire economy to its knees. It added stronger consumer protections and put guardrails around the kinds of complex, high-risk deals that had gone completely unchecked. These laws were not written to slow down innovation. They were written because without them, the alternative was deception and collapse.

It's no secret that young people are drawn to high-risk investments. With fewer assets to protect and a longer horizon ahead of them, the potential upside of a volatile asset feels worth the gamble. Survey data consistently shows that younger investors with thinner balance sheets hold crypto assets at significantly higher rates than older generations. Many entered these markets not through a licensed financial advisor applying a suitability standard, but through social media and peer influence. They are taking on asymmetric risk without the disclosure frameworks that exist to level the information gap between issuers and retail participants. They deserve the same fiduciary-grade protections as any other investor putting their savings to work.

The stakes extend well beyond retail portfolios. Unregulated crypto has proven to be a powerful vehicle for illicit capital flows that directly threaten national security. The Treasury Department, FinCEN, and the FBI have all documented how Iranian terror networks, North Korean state-sponsored hackers, transnational drug cartels, and Russian sanctions evaders have exploited gaps in digital asset oversight to move value outside the reach of American law enforcement.

Congress must resist any provisions that restrict law enforcement's ability to trace, freeze, and prosecute these illicit crypto flows. This debate is not really about innovation and freedom versus restriction. It is about whether we are willing to build a financial system that hostile foreign networks and criminal organizations can exploit with impunity.

There is also a market integrity argument that crypto's most vocal advocates seem to misunderstand. The reason U.S. equity markets attract trillions in global capital allocation is not in spite of their rules, it is because of them. The NYSE and Nasdaq are liquid, trusted, and efficient because listing standards, reporting requirements, and anti-manipulation rules give participants confidence that price discovery is real. Without the same transparency and oversight frameworks for digital assets, mainstream adoption will simply stall.

To be fair, the digital asset space has shown real growth and genuine technological innovation within its own ecosystem. But the places where crypto has flourished under minimal regulatory oversight have also become synonymous with fraud, liquidity crises, and catastrophic customer loss. FTX is the defining example: FTX was a large cryptocurrency exchange that had trusted idols such as Tom Brady and Stephen Curry promote the exchange and induced the younger audience to partake in the crypto world. FTX eventually collapsed under the weight of unaccounted customer funds, undisclosed leverage, and the complete absence of the segregation-of-assets requirements that any registered broker-dealer must follow. Approximately $8 billion in retail funds evaporated. The victims were ordinary people, many of them young, who had no way of knowing the risks they were actually carrying.

The Senate Banking Committee has a genuine opportunity on Thursday when they consider their version of the Clarity Act. A well-constructed digital asset framework that includes strong investor protections, robust Bank Secrecy Act compliance, meaningful anti-money-laundering tools, and real enforcement authority. It would give legitimate issuers a clear path to compliance, give retail investors a reason to participate with confidence, and position America as the global standard-setter for responsible digital asset markets rather than a regulatory race to the bottom.

The ask is simple: don't let crypto write its own rules.

If that’s not possible with this instrument, then a bill should be rejected. Sean Corkery is a Business Development Analyst at Millennium Health and Fitness and a financial scholar in Louisiana.