Five US Senators have penned a letter to federal regulators asking what the governmental bodies 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 U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Treasury, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC).
The senators ask each agency what it is doing to prevent unethical lobbying practices in the crypto industry.
“We write seeking 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 attempt to secure favorable regulatory outcomes as Congress and federal agencies work to craft and enforce rules to regulate this multitrillion-dollar industry.
As part of this influence campaign, crypto firms have hired hundreds of ex-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 services sector – and we are concerned that the crypto revolving door risks corrupting the policymaking process and undermining the public’s trust in our financial regulators.”
The lawmakers also say one of their chief concerns is that the crypto industry may attempt to control regulators using the same strategies deployed by Wall Street executives.
“Just as powerful Wall Street interests have long exercised their influence over financial regulation by hiring former officials with knowledge of government’s inner workings, crypto firms appear to be pursuing the same strategy in order to secure ‘a regulatory system to the industry’s exact specifications.’
Indeed, hiring former regulators and government officials provides the crypto industry with a sense of legitimacy that is ‘a vital currency for an industry that designs many of its products to skirt regulatory scrutiny.’”
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