The crypto market is fast changing. So much so that most crypto firms are now hiring ex-regulators to tighten rules for the crypto industry. It’s currently an industry laden with wide cracks that slip through billions of dollars from consumers and funds.
However, some of the former regulators on-boarded are struggling to keep their jobs, and for good reasons. The crypto market has become a carefree environment, and figuring out the next move is a significant challenge for some appointees.
In March this year, the industry took back Jay Clayton — a former chair of the US Securities and Exchange Commission (from 2017 to 2020). The official turned to crypto as a chief advisor. But some of his peers struggled to take the heat.
Top executives resign from key positions
Chris Giancarlo is the first case in point. The former regulator and board member of Commodity Futures Trading Commission stepped down from his role this week — four months after taking the position.
Brian Brooks, former head of the OCC banking regulator, stepped down last week after serving three months as the US-based CEO of Binance.
Brett Redfearn, the former high-flying SEC official, resigned this week after serving at Coinbase crypto exchange for four months.
Why the quick departures? The young industry is “too hot to bear”. The departures simply reflect the tension of former regulators in trying to enforce new laws in a market that desperately needs to be regulated.
Calls for new powers to oversee crypto exchanges
Gary Gensler, firebrand regulator and chair of Securities and Exchange Commission (SEC), is now calling for new powers to manage crypto exchanges.
This regulatory push has major crypto exchanges consolidating compliance teams as the attention of the now $2 trillion crypto industry intensifies.
FTX, one of the largest crypto markets for derivatives, heeded the call. In the past few weeks, FTX has appointed Ryne Miller as the new general counsel. His work is to ensure FTX.US complies with emerging US and global regulatory policies.
Binance has also hired Richard Teng, former CEO of Financial Services Regulatory Authority at Abu Dhabi Global Markets.
The fast-paced crypto market has lured many experienced bankers to the platform — triggering an influx of experienced former regulators in the crypto financial markets.
The idea of regulating the crypto market is almost similar to regulating the derivatives industry after the 2008 global financial crisis. Many regulators working on new rules a decade ago are now moving into the new market.
The same script is being repeated as former bankers move into the crypto market. As the young digital asset market and its legitimacy continue to build, newly appointed regulators continue to figure out how to apply their banking experience to it.
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