The rotating door project, a Perspective partner, examines executive power and presidential power. Follow them on thesvolvingdoorproject.org.
Last Wednesday, the Blockchain Association, the largest Washington cryptocurrency defense group, announced that it had hired a new CEO, CFTC commissioner Summer Mersinger. Unlike most of the previous commissioners who left the Commodity Futures Trading Commission and in the arms of the private industries, they were responsible for regulating, the future Mersinger employer was announced in front from his departure. The republican commissioner will not leave the CFTC before May 30, which gives him two weeks of continuous political influence as a formally announced employee of a pro-Crypto-Monnaie group.
Mersinger was an ally of a conservative crypto throughout his mandate at the CFTC, voting regularly to help the industry. While Amanda Fischer, director of policies and COO of the pro-financial regulatory group, said to the Perspective: “During its mandate (Mersinger) at the CFTC, the Commission did not protected investors and the aberrant trading models of the police in many crypto tokens, including and in particular the memes of President Trump. For these few actions to apply the law, it has brought more to a permit to allow our elections in the Gambade. Companies to recondition their bets as “derivatives”. »»
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The hiring by the Blockchain Association de Mersinger illustrates the way in which companies exercise the power of the regulatory process. By hiring friendly regulators to their cause in lucrative positions after the government, industry is able to guarantee the conformity of current and future regulators of their long -term financial prospects. Rather than explicitly accepting to pay regulators adapted to their program after their job (which is illegal), companies seeking to influence the orientation of federal policy operate on promoting a tacit understanding that lucrative employment awaits those who wish to help their cause. These jobs are much more in the long term than, let’s say, some gold bars.
Once she is a former CFTC commissioner, Mersinger will not be forbidden to “knowingly (ING), with the intention of influencing, any communication or appearance before the Commission” for a year, but that probably does not matter for the Blockchain Association. The goal is to reward her for things she has already done. And now that it is gone, control of the CFTC can be found in the hands of a single cryptography booster of the Silicon Valley.
The Trump administration has openly adopted cryptocurrency, pushing regulatory revisions which are favorable to industry, and even the launch of Trump brand cryptocurrencies as an ideal self-enrichment. This provided the Blockchain Association with the opportunity to finally adopt the legislation for which it has been fighting since its creation: a bill on the structure of the cryptocurrency market which would go beyond the Securities and Exchange Commission (SEC) of its authority on digital assets and will grant this power to the relatively low CFTC. This was an objective that was effectively pushed by the charm assault on Sam Bankman Fried against the federal government until his cryptographic company FTX imploded, thanks to billions of fraud, and that Bankman Fried went to prison.
Despite the scandal, the idea has never become as politically toxic as it could be assumed given the notoriety of SBF. Instead, the industry remained relatively dormant, pushing other invoices in the foreground, while keeping the hopes of this deregulative package alive.
The hiring by the Blockchain Association de Mersinger illustrates the way in which companies exercise the power of the regulatory process.
Mersinger is hired by the Blockchain Association to direct this revival of CFTC control over the cryptography industry. Instead of putting pressure on the CFTC on behalf of the industry, it will be the face of the crypto charm offensive in Capitol Hill, where she previously worked as chief of staff of the majority of the John Thune Senate. As part of this effort, Mersinger will be able to combine her decade and more legislative experience with the credibility she has won as an old agency commissioner to appease the doubts that the CFTC will be a regulator capable of industry.
Mersinger is not the first CFTC commissioner to believe that the regulator is capable of managing cryptocurrency despite the abundance of fraud, money laundering and the reckless behavior of industry. In fact, the former Democratic president of the CFTC, Rostin Behnam, was among the apparently impatient people that the agency withdraws the reins of the dry, although the CFTC staff is a fraction of the size, having just lower status and being more vulnerable to the interference of the Congress in the budget process. But with a congress controlled by the Republicans and the Democrats of the Congress apparently ready to play the ball with the industry despite its unprecedented expenses for the name of the last cycle Republicans, Mersinger can be what it takes for cryptographic industry to finally see its program crossing the finish line.
But the departure of Mersinger is not only a threat because of the role it can play through dangerously poorly conceived cryptographic legislation. It could also leave the CFTC to the whims of a single Trump sycophant. The five -members commission is currently short of members, and it has fallen to three members once Mersinger has left.
The Democrat Commissioner, Christy Goldsmith Romero, had already announced her intention to retire after the confirmation of Trump’s appointed, Brian Quintenz, but she accelerated the calendar on Friday, announcing her retirement plans at the end of May. This will only leave two commissioners at the agency in early June. In addition to the departure of Goldsmith Romero, the current current president Caroline D. Pham would have sought a suitably comfortable concert outside the government to jump.
Although the Quintenz confirmation hearing is not yet planned, it would not be surprising to see that the Senate Committee for Agriculture would rush through its confirmation to avoid having a CFTC with two communications made up of a republican seeking the door and Democrat Kristin Johnson. Johnson had previously announced his intention to stay, to reverse the course on Wednesday, saying that she was leaving the agency “later this year”. If Johnson leaves before the confirmation of Quintenz, this would lead to a controlled CFTC to a party under Quintenz and Pham. From Pham, Quintenz would be the only commissioner. Alternatively, if Pham sets out on Quintenz’s confirmation, but before Johnson’s departure, the CFTC would have a division even a partisan, something unacceptable for the Trump administration.
In this scenario, in all likelihood, we expect to see President Trump trying to illegally dismiss Johnson to ensure republican control. Since the requirement of the CFTC quorum does not apply to less than three in -practice commissioners, this situation would give the unilateral power of Quintenz on one of the most important financial regulators in the world.
Quintenz, who worked until recently as a head of the A16Z Crypto – Marc policy of Andreessen, a venture capital fund of several dollars from Andreessen, who has invested massively in the crypto – would be able to reign complex financial issues. It would not be necessary to waste precious time in the Senate on the additional confirmations of the Republican commissioners (although it is probably done), because the champion sorted on the aspect of the cryptocurrency industry would have an undisputed control over the CFTC. It is not only a victory for the thrust of longtime cryptography to DC, but also for the president, because his single loyalist would be unlikely to take steps to slow down the Empire of corruption booming of the president.
While Johnson said that it was “convinced that the Commission will continue to do important work to protect investors and customers, the fight against fraud and market manipulation and ensure market integrity and stability”, there are few reasons to believe it. A CFTC managed by Quintenz would be a liable to acquired interests, above all Crypto. Consumer protection would probably not be considered.
While the Democrats of the Senate should fight to prevent this result, there are reason to doubt that this worst case would lead to a unified democratic opposition. Marc Andreessen signed up with Ruben Gallego, the most high-end democrat in the Senate banks’ subcommittee on digital assets. Other Democrats in the Senate joined Gallego to vote to advance the law on the dangerous genius of the cryptocurrency on Monday evening, dividing the Caucus and leading to a stormy exchange on the prosecution of the Senate between Kirsten Gillibrand and Elizabeth Warren of Crypto-Skyptic, the crypto-skilbrand of the Senate banking committee. Gillibrand in particular was among the strongest votes calling for the CFTC to be the main regulator of the cryptocurrency industry, returning at the time when SBF dictated cryptographic policy to DC
Fischer of best markets said to Perspective This “President Trump may well dismiss the CFTC Johnson commissioner when he is politically advantageous, but the law is not on his side. In fact, Democrats should insist on protecting the CFTC commissioners and other multi-membership commissions instead of working with the cryptographic industry to loosen the regulations. ” Unfortunately, it seems that Johnson might not wait for the CFTC to fight this. If she left the agency, this would cancel the possibility of a legal struggle to protect a democratic seat.
A unique CFTC is the perfect combination of authoritarianism, corruption and carefreeness that suits the Trump era. Although the dismantling of the CFTC is done on behalf of the cryptocurrency industry which has become one of the main donors of the Republican Party in 2024, the agency is also more generally pinned regulator in the global financial system. The CFTC has already shown its desire to stadium dangerous policies such as the trading of 24/7 derivatives and allowing game companies to bypass regulations by pretending to be derivatives.
The increase in the lack of surveillance will not only feed the dangerous growth of cryptocurrency, but it could also allow the term markets and derivatives not to be checked as they did in the 2008 financial crisis. By hiring Mersinger, the Blockchain Association did not simply buy a former CFTC commissioner (who will soon) be to carry out their lobbying campaign; He may have bought the entire agency.
