If You Can’t Beat Them, Join Them - Bitcoin Is Hiring Regulators
While everyone is looking for an indication that institutional money is about to flood into bitcoin and revive the market, we just got another conformation that crypto has indeed entered the big leagues. Companies in the industry are now putting former regulators on their payroll, as is common for Wall Street mega banks, government-supported telecom monopolies, competition-stifling tech giants and the like.
Also Read: Bitcoin in Brief: New Patents, Research Centers and a $300M Fund
Another Regulator Gets a Big Paycheck
Along the announcement of its new $300 million a16z crypto fund, Andreessen Horowitz also revealed it had hired Katie Haun as its newest general partner. While most tech publications hailed the move in the name of diversity and inclusivity, due to her gender, few took note that she is yet another in a string of government lawyers and regulators who joined the ranks of cryptocurrency companies recently.
According to her bio at Stanford, Haun spent over a decade as a federal prosecutor with the U.S. Department of Justice (DOJ), where she focused on fraud, cybercrime, and corporate compliance failures alongside agencies such as the SEC, FBI, and Treasury. She was the DOJ’s first-ever coordinator for digital assets, and led investigations into the Mt. Gox hack and the corrupt agents on the Silk Road task force. As her impressive resume proves, Haun is no doubt a very capable and highly intelligent woman. However, she is a law expert not a venture capital or investment expert, which could raise some questions about her new role.
Free and Fair Market?
As mentioned before, Haun is only the latest regulator to make the move into the crypto industry. In May 2018, Kraken hired Mary Beth Buchanan, the former US Attorney for the Western District of Pennsylvania. In December 2017 Bittrex hired Kiran Raj, a former Deputy General Counsel at the Department of Homeland Security (DHS), as chief strategy officer, as well as John Roth, a DHS Inspector General who spent twenty-five years at the DOJ, as chief compliance and ethics officer. In November 2017, the former New York Superintendent of Financial Services who pushed for the Bitlicense, Ben Lawsky, joined Ripple’s board of directors. And the list goes on and on as far back as in 2015, when Itbit hired former NY DFS General Counsel Daniel Alter as its general counsel and chief compliance officer.
All of this is, of course, not illegal and serves both parties. The crypto companies get people on board that can help them navigate the complex legal system, and the former regulators get to leverage their government experience in the much more lucrative private sector. The main downside is that this practice can potentially hurt end users as it hampers competition by erecting steep barriers for entry. Just imagine you want to open a new US crypto exchange. You might fear that, unless you have the financial resources and right connections to hire a former top government lawyer, you will have a severe disadvantage compared with the established players, and ultimately cancel the plan as a result. Hopefully, at some point some honest lawmakers will notice what is happening and conclude that the regulatory maze is too cumbersome for the good of the market. Until that happens, bitcoin companies will keep hiring people that mix in the right circles and know who to give a call when needed.
Are these developments good for the long term health of the bitcoin ecosystem? Share your thoughts in the comments section below.
Images courtesy of Shutterstock.
Verify and track bitcoin cash transactions on our BCH Block Explorer, the best of its kind anywhere in the world. Also, keep up with your holdings, BCH and other coins, on our market charts at Satoshi’s Pulse, another original and free service from Bitcoin.com.
Related
VERDAD is the Most Dangerous Crypto Bill to Face Congress Yet
The U.S. Congress is considering more than 20 bills on cryptocurrency. One deserves special attention: S.1025, the Venezuela Emergency Relief,… read more.
Changes Afoot for Philippine Crypto-Friendly Economic Zone
The special economic zone in the Philippines known for its crypto friendliness is undergoing some changes. Government-owned Cagayan Economic Zone… read more.
