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Veteran Wall Street enforcers are landing new roles in virtual currencies
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Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#12>The drumbeat of hires crescendoed in November when Ripple, [...] added Ben Lawsky to its board. He earned a tough reputation as New York’s top financial watchdog by pushing banks to scrutinize client transactions for illicit dealings.
>[...]Lawsky’s jump to Ripple was particularly notable because he helped pioneer regulation of cryptocurrencies. He introduced the BitLicense, a requirement for digital currency companies that wanted to operate in New York.
What a bunch of white washing. Imagine a parallel universe were the DMCA and the Online Copyright Infringement Liability Limitation Act made online service providers responsible for the content that their user's posted and being called a "pioneer".
Lawsky rose the specter of unsubstantiated "terrorism" fears to create onerous, outdated, maladapted Bitcoin regulations. Shortly after that he quit his job as a regulator and then setup a firm to collect fees for helping "guide" firms through the regulations he just created. Corruption / rent seeking / anti-competative behavior. Bank lawyers even told Lawsky to shut bitcoin down[1]
[1]https://twitter.com/MarcHochstein/status/922611866848804864
Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#13What a strange website experience. The original headline, both on the article and HN, was "Crypto’s Hottest Hires Aren’t Millennials. They’re Banking Cops". I have no idea what the term "Banking Cops" means. I press `CMD-F` to find "cop" on the page. The first result is the instance in the headline. I press enter to find the next occurrence of "cop", the one in the story that will surely explain the title, and I'm im…
IMO "banking cops" is just clickbait. Ah, the vicissitudes of prose: journalists trying to coin a phrase. But it's just confusing, as you point out.
They're just talking about regulators and compliance officers. The former work at the SEC/FINRA, and the latter work in-house for banks, broker-dealers, and investment firms.
Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#14This is what fuels the revolving door. Regulations create a class of workers with previous experience in the regulatory and political system, that fetch an access premium. Another example of this is members of Congress who become lobbyists seeing an average increase of 1,500% in their salary upon the career change.
It should not be allowed.
Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#15Is anyone else bothered by the way media refers to these companies as 'cryptos'?
Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#16I remember reading in a Michael Lewis book (Big Short maybe?) that Wall Street hires from the SEC and Rating Agencies in-order to know the in's and out's better as well as get better treatment. Hence the implication in the book that those who stay behind at the SEC and Rating Agencies are not wanted by the banks. Seems like they're copying from those who came before them.
That means working at the SEC is an auditioning process for big money bank jobs. Talk about conflict of interest.
Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#17This is what fuels the revolving door. Regulations create a class of workers with previous experience in the regulatory and political system, that fetch an access premium. Another example of this is members of Congress who become lobbyists seeing an average increase of 1,500% in their salary upon the career change.
Safeguards are put in place because people are prone to malice, fraud, violence, and financial fuckups in the past.
Mandate penalties if insiders are abusing their responsibilities and hold people accountable.
Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#18This is what fuels the revolving door. Regulations create a class of workers with previous experience in the regulatory and political system, that fetch an access premium. Another example of this is members of Congress who become lobbyists seeing an average increase of 1,500% in their salary upon the career change.
Consider a different example: someone participates in adding threading to the C++ standard. They then get hired at a development tools company to help implement the standard. Anything unseemly there?
Your characterization rests on the premise that the regulations are a priori negative. If you start from the premise that the regulations are good things, then there isn’t necessarily anything wrong or inconsistent about someone saying “I’m going to help create these rules which I think will be good for the industry” and “now I’m going to help companies implement and follow these rules.”
I’m pretty skeptical of regulation myself so I can see where you’re coming from. I personally think we should let crypto currencies be complete anarchy as an experiment. But crypto currencies are a good illustration of how regulation and regulators arise naturally. Big bad government doesn’t come in and start regulating things people never complained about. First people lose a lot of money. Second, the industry welcomes some level of regulation, in order to reestablish trust with consumers that might otherwise be scared off. Third, regulation gets implemented on the premise that its good for both consumers and for the industry, because it allows the industry to overcome trust barriers.
Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#19Kind of funny that this "kill the banks, bring down the system" technology is being infiltrated by Wall Street lifers.
Reminds me of this quote from a recent Matt Levine article:
> [Andy] Noto is leaving Twitter to become CEO of Social Finance, the online lender whose mission just a couple of years ago was to "kill banks." Now it will be run by a former Goldman Sachs Group Inc. banker. The banks do not want to be killed, and they play a long game.
Re: Veteran Wall Street enforcers are landing new roles in virtual currencies
#20I remember reading in a Michael Lewis book (Big Short maybe?) that Wall Street hires from the SEC and Rating Agencies in-order to know the in's and out's better as well as get better treatment. Hence the implication in the book that those who stay behind at the SEC and Rating Agencies are not wanted by the banks. Seems like they're copying from those who came before them.
That means working at the SEC is an auditioning process for big money bank jobs. Talk about conflict of interest.
This happens everywhere regulation exists. That doesn't make regulation inherently bad, but before you can come to reasonable conclusions about how to change things, you have to come to terms with the spontaneous order your changes will result in. You can't abolish self-interest.