In the United States, it is easy for public servants to bounce back into the private sector. Moreover, certain profiles from the public are highly sought after by companies. In recent years, there have been a significant number of financial regulators’ officers, hired by crypto companies. Typically, these come in lobbying roles on behalf of the crypto industry. This worries a group of American lawmakers, who have opened an investigation.
What are regulators doing to prevent the phenomenon?
On October 24, a group of five American senators addressed a letter to seven financial regulators. They are Elizabeth Warren, Sheldon Whitehouse, Rashida Tlaib, Alexandria Ocasio-Cortez, and Jesús García. The recipients of the document are the SEC, Treasury, Fed, CFTC, etc. In the letter, the leaders have demand agency officials to explain what measures they have in place to prevent former state officials from working in crypto businesses.
Over the past few years, more than 200 civil servants have moved from public service to crypto businesses. This, as advisers, board members, investors, lobbyists, legal advisers or internal executives, reports the Tech Transparency Project. Furthermore, there are already at least eight former congressmen, 79 former congressional staffers and 32 former White House officials working for the crypto value chain.
“We are writing to request information on the steps your agency is taking to end the gateway between our financial regulatory agencies and the crypto industry. The sector has rapidly stepped up its lobbying efforts in recent months. He is spending millions there to try to secure favorable regulatory outcomes, as Congress and federal agencies work to craft regulations (…) As part of this influence campaign, crypto companies have hired hundreds of former civil servants. We are concerned that this risks corrupting the policy-making process and undermining public confidence in our regulators”.
The senators want to enlighten the Americans on the issues of conflict of interest that could arise from these transfers of jurisdiction. In addition, their letter contains several other questions, including on ethics and transparency. Regulators must respond to questions by November 7.
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