Lawmakers in Washington have written to federal financial regulators, seeking details on the steps taken to stop the “revolving door” between the regulatory agencies and the cryptocurrency industry.
Senators Elizabeth Warren and Sheldon Whitehouse, along with House members Alexandria Ocasio-Cortez, Jesús G. "Chuy" García, and Rashida Tlaib claimed that the crypto industry has considerably increased lobbying efforts in recent months and spent millions to get favorable regulatory outcomes, as Congress and federal agencies work to craft and enforce rules to regulate the industry.
People’s trust in financial regulators under threat
“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 stated.
They further indicated that crypto firms appear to be employing the same tactic to obtain "a regulatory system to the industry's exact specifications," much like Wall Street interests have done for years to influence financial regulation by employing former government officials who are familiar with how the government works.
“Americans should be able to trust that financial rules are crafted to reduce risk, improve security, and ensure the fair and efficient functioning of the market – not simply to cater to the crypto industry’s desire to avoid the sort of regulatory crackdown it has faced in China and elsewhere,” the lawmakers noted.
Lawmakers pose hard-hitting questions
Among other questions, they sought to know how long a person was prohibited from looking for work in a sector with which they had dealt while serving in a regulatory capacity.
The lawmakers also asked what measures were in place to prevent agency decisions from being improperly affected by possible conflicts of interest involving current or former employees.
The letter was sent to the 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).
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