FOR IMMEDIATE RELEASE
Contact: Max Moran, [email protected]
Financial disclosure documents released by Michael Barr — President Biden’s nominee to be the Federal Reserve’s Vice Chair for Supervision, the most powerful financial regulator in the country — reveal broad investments in the emerging financial technology, or “fintech” sector, including in companies related to cryptocurrency, debt collection, and small-dollar lending.
The disclosures show that Barr has investments, often of less than $50,000 according to his valuations, in over 80 fintech start-ups. Most of Barr’s holdings are in firms backed by Nyca Partners, a fintech-focused venture capital fund built by Wall Street and Silicon Valley veterans which Barr has advised for years.
Several of Nyca’s advisers have revolved in or out of key financial regulatory positions where they’ve set precedents for how financial regulatory law does or doesn’t apply to the nascent fintech industry. Barr, whose Senate committee hearing is scheduled for next Thursday, May 19th, would be entering the most powerful regulatory role of any NYCA advisor by far. Barr’s protege Adrienne Harris was also a Nyca adviser, and is now the superintendent of the New York Department of Financial Services (NYDFS), the state-level regulatory agency for America’s financial capital.
Revolving Door Project Personnel Team Director Max Moran said “The next Vice Chair for Supervision will play a key role in determining how fintech and cryptocurrency impact the financial system. Especially after last week’s total collapse in the cryptocurrency market, the Fed needs a regulatory chief who everyone can trust is acting independent of pressures from industry, personal financial interests, and a desire for powerful private-sector jobs after their time in government. The Jerome Powell Fed has been notoriously lax on ethics concerns. Senators and the press must find out the extent of Barr’s financial and personal interests in fintech and cryptocurrency, how he views these digital ‘innovations’ in finance (always a risky prospect at best), and why they should trust him to act in the public’s best interest.”
Barr has investments in a range of types of companies, including:
- Consumer finance apps, which either help individuals manage their finances, offer small-dollar loans, or both.
- Application programming interfaces (APIs), which are programs that interact with other pieces of software to execute complex functions without requiring extensive user input. Barr is invested in APIs that execute stock and derivative trades, underwrite insurance, check for regulatory compliance, and more.
- Data-visualization tools for businesses’ financial officers to see their payroll, cash-on-hand, credits and debits, and so on.
- Artificial intelligence and machine-learning programs which identify places where financial and commercial companies can cut costs or expand profits.
Some of the companies in which Barr is invested directly relate to trading cryptocurrency. These are not companies which generate their own cryptocurrencies, but which perform functions for cryptocurrency investors and traders. NYCA Partners has a dedicated crypto investment section led by NYDFS’ former top regulator of cryptocurrencies, Matt Homer.
Cryptocurrencies fell in value calamitously last week, an event which many are linking directly to Federal Reserve policy. The crypto collapse has led to wholesale calls for stronger regulation of the sector, which Barr would play a key role in.
Barr’s investments in crypto-related fintechs include positions in:
- Zero Hash Holdings, an API for helping financial institutions’ customers buy and sell crypto.
- Acorns Grow, which lets small-dollar investors pick broad categories of investment rather than individual holdings, and which encourages users to include Bitcoin-linked ETFs in their portfolios.
- Tint Technologies, which helps tech companies set up insurance offerings for the assets related to their products. Tint specifically lists “Bitcoin mining equipment” and “crypto deposit insurance” as possible insurance offerings.
- Sardine AI Corp, which builds anti-fraud technology for digital wallets, including crypto wallets. The company claims to have built technology that helped to scale Coinbase.
- Axoni Inc, which builds blockchain infrastructure for large financial institutions.
- Metrika, which “provides communities with end-to end visibility and actionable insights into the health of blockchain networks.”
In addition, some of Barr’s other disclosed investments raise concerns related to consumer protection, worker’s rights, and more. These include:
- TrueAccord, a digital debt collection company.
- GRIT Financial, in which Barr disclosed 96,000 unvested shares of stock. The company offers “earned wage access” products, which often strongly resemble payday loans.
Barr also disclosed the existence of “Michael S Barr LLC,” a firm whose services and clients are unknown. Many former government officials establish consultancies that act as “shadow lobbying” firms where they provide advice to the highest bidder on dodging regulations and smooth-talking government officials.
Barr’s financial disclosure form is attached to this press release, and accessible here.
###
PHOTO CREDIT: “Michael Barr” by Center for American Progress is licensed under CC BY-ND 2.0.