Crypto Firms Rush To Hire Former Regulators As Federal Agencies Seek to Tame ‘Wild West’ Industry | Currency News | Financial and business news

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Changpeng Zhao, CEO of Binance

Andrey Rudakov / Bloomberg via Getty Images

Over the past few months, Binance has called on a small army of former regulators. Other crypto firms are also rushing to onboard former regulators, including most recently Donald Trump’s SEC Chairman Jay Clayton, joining the $ 2 billion crypto platform Fireblocks. More hires may be forthcoming as the $ 2 trillion industry tries to isolate itself. Sign up for our daily newsletter, 10 things before the opening bell here.

Earlier this week, Binance CEO Changpeng Zhao said he spent 80% of his time dealing with regulation. And if hiring choices are any indication, he’s hardly exaggerating.

In recent months, the largest crypto exchange has drawn on a small army of former regulators, including former acting currency controller Brian Brooks, Senate finance committee chairman Max Baucus, investigator IRS criminal Greg Monahan and California chief financial regulator Manuel Alvarez. . As of May, Binance says it has added 110 new employees to its compliance and customer support teams.

Other crypto firms are also rushing to onboard former regulators, including most recently Donald Trump’s SEC Chairman Jay Clayton, joining the $ 2 billion crypto platform Fireblocks. In April, former CFTC chairman Chris Giancarlo joined BlockFi’s board of directors. Ripple hired Mary Jo White, president of Barack Obama’s SEC, to defend the company against a lawsuit brought by his former agency.

Binance’s high-profile hires came in response to a rapidly escalating regulatory crackdown on the exchange, which has been restricted or banned from Italy to Malaysia. Zhao says Binance is “pivoting” to a proactive approach to regulation from a reactive approach.

But the pivot was strewn with pitfalls. The recent resignations of Brooks and Alvarez came just after a failed $ 100 million deal over fears Zhao would have too much control over Binance’s U.S. division, which is nominally independent.

Regulators, too, have tried to balance proactive and reactive approaches. When SEC Chairman Gary Gensler called crypto “the Wild West,” he suggested that greater enforcement would be the agency’s priority. But SEC Commissioner Hester Peirce stressed that crypto needs forward-looking frameworks too – so companies know what the limits of the law are.

“I think we’re heading towards developing a forward-looking regulatory framework, but I expect a long journey to get there,” Daniel Bresler of the firm’s blockchain unit told Insider. Seward & Kissel lawyers.

The rapidly changing regulatory environment amid an immature industry is likely a factor behind the resignations of regulators. Along with Binance’s woes, former SEC official Brett Redfearn, whom Coinbase hired in April, left the company this month, citing a shift in priorities away from crypto stocks, according to the Wall Street Journal.

Despite these growing pains, more hires could be forthcoming as the $ 2 trillion industry tries to isolate itself.

“If we don’t start planning and taking action soon, we are at risk,” crypto lobbyist Perianne Boring told The New York Times.

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