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US lawmakers have raised concerns about the revolving door between financial regulators and the crypto industry. “Over 200 government officials have moved between government services and crypto firms,” the lawmakers said, adding that they include 31 Treasury Department officials and 28 Securities and Exchange Commission (SEC) officials.
Five US lawmakers have sent a letter to seven financial regulators to ask about steps they are taking to prevent the revolving door between their agencies and the crypto industry. The letters, dated October 24, were signed by Sen. Elizabeth Warren (D-MA), Sen. Sheldon Whitehouse (D-RI), Rep. Rashida Tlaib (D-MI), Rep. Alexandria Ocasio-Cortez (D-NY), and Rep. Jesús G. “Chuy” García (D-IL).
The letters were sent to Securities Exchange Commission (SEC) Chairman Gary Gensler, Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam, Treasury Secretary Janet Yellen, Federal Reserve Chair Jerome Powell, Federal Deposit Insurance Corporation (FDIC) Acting Chairman Martin Gruenberg, Office of the Comptroller of the Currency (OCC) Acting Comptroller of the Currency Michael J. Hsu, and Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra.
“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 lawmakers wrote. “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 multi-trillion dollar industry.”
They explained:
As part of this lobbying campaign, crypto firms have hired hundreds of former government officials … and we are concerned that the crypto revolving door risks corrupting policymaking and undermining public trust in our financial regulators.
“According to the Tech Transparency Project, over 200 government officials have moved between government services and crypto firms, serving as advisors, board members, investors, lobbyists, legal counsel or internal managers,” the letter says.
The lawmakers added that they include at least 31 Treasury Department officials, 28 SEC officials, 15 CFTC officials, six Federal Reserve officials, five OCC officials, three CFPB officials and two FDIC officials.
The letter continues:
These officials join at least eight former members of Congress, 79 former congressional staffers and 32 former White House officials currently advising or lobbying crypto interests.
“Americans should be confident that regulators are working on behalf of the public, rather than auditioning for a high-paying lobbying job when they leave public service. However, the rapidly spinning revolving door out of government and into the crypto sector undermines both imperatives,” he stressed the legislators.
Their letters conclude with a list of questions regarding each agency’s policies to prevent a revolving door with the crypto industry. For example, one question asks what ethics and transparency rules are in place to ensure the integrity of agency officials. Another question concerns how each agency protects its policies from being unnecessary
affected by current or former employees’ potential conflicts of interest. The regulatory authorities were asked to provide a response by 7 November.
What do you think about the revolving door between financial regulators and the crypto industry? Let us know in the comments section below.
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