US senators write letter to Fed and regulators seeking clarification on crypto code of conduct guidelines
Five US senators have written a letter to federal regulators asking what government agencies are doing to uphold ethical standards within the crypto industry.
In the letter, Senators Elizabeth Warren, Alexandria Ocasio-Cortez, Sheldon Whitehouse, Rashida Tlaib and Jesús García address the US Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Treasury, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC).
The senators are asking each agency what it is doing to prevent unethical lobbying in the crypto industry.
“We are writing to seek information about the steps your agency is taking to stop the revolving door between our financial regulatory agencies and the cryptocurrency (crypto) industry.
The crypto sector has rapidly escalated its lobbying efforts in recent months, spending millions in an effort to secure favorable regulatory outcomes as Congress and federal agencies work to create and enforce rules to regulate this multibillion-dollar industry.
As part of this advocacy campaign, crypto firms have hired hundreds of former government officials. We have long been aware of the revolving door in other sectors of the economy – from big tech, to the defense industry, to other parts of the financial sector – and we are concerned that the crypto revolving door risks corrupting policymaking and undermining public confidence in our financial regulators.”
The lawmakers also say one of their biggest concerns is that the crypto industry could try to control regulators using the same strategies implemented by Wall Street executives.
“Just as powerful Wall Street interests have long exerted their influence over financial regulation by hiring former government officials with knowledge of the inner workings of government, crypto firms appear to be following the same strategy to ensure ‘a regulatory system to the industry’s exact specifications.’
Indeed, hiring former regulators and government officials gives the crypto industry a sense of legitimacy that is ‘an important currency for an industry that designs many of its products to avoid regulatory scrutiny.’
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Featured image: Shutterstock/Mia Stendal/Salamahin
