Fintech

Revolving Door Statement on Crypto proponent Larry Summers joining the board of Sam Altman’s OpenAI

Continued reliance on underregulated financial technology companies could stand to further harm the agency’s reputation and goals for lending equity.

It’s high time that members of the press who regularly turn to Summers for his views on the economy begin questioning him on how he is able to adequately perform his multiple advisory roles and moreover, why there is a pattern of illegality at firms he advises. Or they could simply toss him to the aether, and platform non-conflicted experts instead.

Short-seller Hindenburg Research says the payments mogul Block has inflated user metrics, ignored widespread criminal transactions on its platforms, and evaded regulations.

As of now, Barr is assigned to investigate supervisory failures that occurred under his watch featuring a bank that catered in particular to the crypto and fintech industries which Barr was so active in immediately prior to revolving back into government. Barr is a walking conflict of interest. His central role in the investigation is damning

A leading voice in this push is Sam Bankman-Fried, 30-year-old CEO of crypto trading exchange FTX. Christened by some as a crypto prince and others as Washington’s aspiring kingmaker, Bankman-Fried has in the past year developed an extensive crypto policy agenda that entails revolving-door hiring of former CFTC officials, formation of super PACs, and congressional campaign donations.

Over a decade after the financial crisis, few would still dispute that the revolving door between financial regulators and the financial industry helped pave the way for economic disaster. In the years preceding the crash, regulators who came from the country’s largest banks and planned to promptly return to them, removed regulatory restraints and turned a blind eye to the predictably dangerous effects (see, e.g. Robert Rubin and Alan Greenspan). In the next administration, different regulators drawn from the same well let the fraudsters off the hook and left the working people who had fallen victim to them out to dry.  

President Biden has repeatedly declared himself “the most pro-union President you’ve ever seen.” But a pro-labor President should also support the workers for whom he’s the boss — namely, the federal civil service.

Interagency cooperation is essential to ensuring the Biden administration adequately manages the risks associated with the growth of cryptocurrency, including illicit finance, tax evasion, investor and customer protection, shadow banking, and financial stability.

Under Otting and Brooks’ leadership, the OCC rolled out rules contrary to its responsibility to maintain a federal banking system that is safe against systemic risks and provides aid to all customers. Now they’re all out of power — but Acting Comptroller, Blake Paulson, whose ascent was ensured by Brooks and Mnuchin, has demonstrated no desire to change course from the path set by Trump’s lackeys. That is why Biden needs to act quickly and appoint a Comptroller who recognizes the dangerous precedent set by the Trump administration.

Alvarez only re-entered the regulatory world after six years at Affirm, a fintech e-lender that offers loans up to 30 percent APR under sometimes confusing terms at the point of sale, so consumers rarely have the opportunity to shop around or read the fine print for an informed decision.

Since fintech apps provide a wide range of financial services, there are many potential harms to leaving the industry largely under-regulated — especially since many fintech and cryptocurrency firms design their products to narrowly evade existing laws that define certain types of financial products, and thus, the regulations to which they are subject.