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Press Release | November 17, 2022

The Public Does Not Need Another Fintech-Friendly Regulator

CryptocurrencyEthics in GovernmentFinancial RegulationRevolving Door
The Public Does Not Need Another Fintech-Friendly Regulator

Contact: Timi Iwayemi, iwayemi@therevolvingdoorproject.org  

Revolving Door Project Senior Researcher Timi Iwayemi issued the following statement regarding rumors that New York Department of Financial Services Superintendent Adrienne Harris is being considered for financial regulatory roles in the Biden administration:

“In the aftermath of the FTX implosion, it is clear that there are people who have been proven clearly correct (crypto skeptics) and people proven clearly wrong (crypto boosters). It is important for Joe Biden’s legacy that he only nominate regulators who, a la Gary Gensler and unlike Rostin Behnam, have a track record of being able to sniff out trendy but dangerous financial speculation.”

“Prior to its bankruptcy filing, FTX, in line with the broader crypto industry, had spent the past few years courting regulators and lawmakers in Washington to rubber stamp rules and laws favorable to the crypto industry status quo. This culminated in the development of the The Digital Commodities Protection Act, which would grant primary oversight authority of the industry to the weakly-funded and understaffed Commodity Futures Trading Commission (CFTC). Current CFTC chair Rostin Behnam endorsed this move, claiming that the price of Bitcoin could double under his watch.”

“But the recent FTX-driven collapse of the crypto industry makes clear the importance of clear-eyed aggressive financial regulators, as opposed to mere industry affirmers, exercising their full existing regulatory authority over the industry. Adrienne Harris fits the latter mold, having called on regulators to focus their energies not on identifying fintech firms’ predatory practices but on promoting innovation.”

“More worryingly, Harris’s pro-industry approach is not just rhetoric. Before her current stint as New York’s leading financial regulator, she offered direct consulting to a number of fintech startups, and sat on the boards of scandal-ridden Lending Club and the fintech-funded Alliance for Innovative Regulation, which has advocated for weaker consumer protections.”

“At a critical juncture such as this where the industry seeks kid-glove treatment from regulators, backgrounds such as Harris’s should be disqualifying. The crypto industry has already done more than enough damage to customers’ wealth and wellbeing. It would be grossly irresponsible to appoint a regulator like Harris, who would likely support the industry’s goal of accessing the federal banking system via the rails of the Office of the Comptroller of the Currency, to serve as Comptroller.”

“Biden should choose prudential regulators who have a history of prudence.”


PHOTO CREDIT: “MIT Bitcoin Expo 2022 – Sam Bankman-Fried” by MIT Bitcoin Club is licensed under CC – BY

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