The revolving door between the crypto industry and financial regulators has pushed US lawmakers to become concerned about the matter.
According to a lawmaker, more than 200 officials of the government have moved between crypto companies and public service.
This includes 28 officials of the Securities and Exchange Commission (SEC) and 31 officials from the Treasury Department.
Seven financial regulators have been sent a letter by five US lawmakers in which they have inquired about the measures implemented for preventing a revolving door between the crypto industry and their respective agency.
Dated October 24th, the letters were signed by Senator Sheldon Whitehouse, Senator Elizabeth Warren, Representative Jesus G. ‘Chuy’ Garcia, Representative Alexandria Ocasio-Cortez and Representative Rashida Tlaib.
The first three recipients of the letter were Gary Gensler, the Chairman of the Securities and Exchange Commission (SEC), Rostin Behnam, the Chairman of the Commodity Futures Trading Commission (CFTC), and Janet Yellen, the Treasury Secretary.
Then came, Jerome Powell, the Chairman of the Federal Reserve, Rohit Chopra, the Director of the Consumer Financial Protection Bureau (CFPB), Michael J. Hsu, the Acting Comptroller of the Currency of the OCC and Martin Gruenberg, the Acting Chair of the Federal Deposit Insurance Corporation.
The lawmakers said in the letter that they were looking for information about the steps that these respective agencies were taking for stopping the revolving door between them and the crypto industry.
They said that the lobbying efforts of the crypto industry had seen an escalation in recent months, as it had spent millions for securing favorable regulatory decisions.
This is in light of federal agencies and Congress working on crafting and enforcing rules for regulating the crypto industry, which is worth more than a trillion dollars.
The lawmakers said that as part of their efforts, the crypto industry had employed hundreds of former government officials and this was a cause for concern.
They said that such a revolving door could lead to corruption in the policymaking process and also undermine the trust of the public in the regulatory authorities.
The Tech Transparency Project has revealed that about 200 officials have moved between the crypto space and the government, taking positions of legal counsel, investors, lobbyists, board members, advisers and in-house executives.
According to the lawmakers, these include 31 officials of the Treasury Department, 15 officials of the CFTC, 28 officials of the SEC, five officials of the OCC, six officials of the Fed, 3 officials of CFPB and two officials of FDIC.
The letter further said that there were also 79 former staffers of Congress, eight ex-members of the Congress, and 32 former officials of the White House that are currently lobbying or advising for crypto companies.
The lawmakers said that the public needs to be confident that the regulatory agencies are working for the public, rather than trying to get a high-paying job once they leave the government.
They said that these goals are undermined due to the revolving door that exists between the crypto sector and the government.