Brandon Ferrick, chief legal officer at Douro Labs, recently dispelled fears regarding the crypto industry’s alleged regulatory capture. He stated that the U.S. Securities and Exchange Commission’s (SEC) transparency in seeking public opinion on crypto regulations and conducting open forum discussions indicate no signs of such capture presently.
In a conversation with Cointelegraph, Ferrick pointed out potential indications of regulatory capture, which include a revolving door phenomenon from the public to the private sector, repeated attendees at regulatory events, and preferential treatment for specific crypto projects. However, Ferrick mitigates these concerns by saying, “I am not overly concerned at the moment, as much of the regulatory feedback, particularly from bodies like the SEC, is entirely transparent and public. There are ample opportunities to engage in dialogues with regulators about revising or reconsidering the existing regulatory frameworks.”
He further added, “[The SEC] provides a public platform where anyone can submit their opinions on the crypto regulatory environment, and even arrange meetings with them.”
As the crypto sphere increasingly interacts with the conventional financial system and engages more with state regulators, some experts and executives fear that the industry might fall prey to regulatory capture, which could warp incentives and politicize the emerging crypto sector.
The SEC has been actively holding roundtable discussions on crypto policies, a departure from the enforcement-based regulatory approach under the previous SEC chair, Gary Gensler. On March 21, it conducted its inaugural crypto roundtable, where the attendees were crypto industry leaders, SEC officials, and even critics of the crypto industry.
The SEC’s April 11 roundtable had a different set of panelists, including representatives from Uniswap and Coinbase, and focused on trading rules. The upcoming panel scheduled for April 25 will concentrate on formulating guidelines for crypto custodians and other firms managing crypto for clients.
