A former Pentagon chief wants Congress to think about crypto regulation the way it thinks about fighter jets and foreign adversaries. Mark Esper, who served as Secretary of Defense under the Trump administration, published an op-ed in the Financial Times on August 7 arguing that the Digital Asset Market Clarity Act is not only a financial markets bill, but also a national security measure.

Esper’s case is direct: countries such as North Korea and China are increasingly using digital assets for illicit purposes, and the US regulatory framework has not kept pace. His proposed answer is the CLARITY Act (H.R. 3633), which would extend the Bank Secrecy Act’s anti-money-laundering and know-your-customer requirements to digital-commodity brokers while giving the Treasury Department enhanced authority to pursue state-sponsored bad actors.

What the CLARITY Act would do

The bill addresses one of crypto’s longstanding regulatory problems: which agency is responsible. The CLARITY Act draws clearer boundaries by placing digital assets into three categories. Securities would remain under the SEC. Digital commodities would fall under the CFTC. Stablecoins would be handled separately under the GENIUS Act, which has already passed.

The legislation also adds enforcement power. It would extend Treasury’s Section 311 authority to digital assets, a tool historically used to restrict foreign banks and financial institutions from the US system when they are tied to money laundering or terrorism financing.

The bill has already advanced through major legislative steps. The House passed it by a 294-134 vote in July 2025. The Senate Banking Committee approved it with a bipartisan 15-9 vote in May 2026. Senate Majority Leader John Thune has filed cloture, which sets up a procedural vote for September 15, 2026.

Why Esper is framing it as national security

Esper is not a neutral observer. He sits on Coinbase’s Global Advisory Council, giving him a professional stake in clearer crypto rules. Still, his national security argument stands on its own because the threats he cites are well documented.

North Korea’s Lazarus Group has been linked to some of the largest crypto thefts in history, with stolen digital assets reportedly funneled into the regime’s weapons programs. China has also used cryptocurrency to evade sanctions and finance espionage operations. Under the current regulatory patchwork, US authorities face greater difficulty tracking and disrupting those activities.

That is part of why the debate is now moving beyond market structure and into enforcement. Esper’s main argument is that keeping crypto activity onshore, under clear rules, would give US intelligence and law enforcement better visibility into financial flows than pushing activity offshore into less regulated jurisdictions.

The timing of the op-ed is notable. With a procedural vote six weeks away, Esper’s intervention appears intended to help build momentum among senators who may see crypto regulation as a narrow financial policy issue rather than one connected to defense and intelligence priorities.

What markets are watching

Wall Street has been following the legislative timeline closely. When the Senate Banking Committee advanced the CLARITY Act in May 2026, crypto-linked equities moved quickly. Coinbase shares rose 9% in the days around the vote. Other crypto-related stocks gained in the 6% to 8% range.

One issue to watch is that the CLARITY Act’s extension of Bank Secrecy Act requirements to digital-commodity brokers could raise compliance costs for smaller exchanges and DeFi platforms, potentially leaving the market more concentrated among a few large, well-capitalized firms such as Coinbase. That makes Esper’s advocacy, while grounded in national security concerns, also aligned with the interests of his advisory client.