The NY Times had a superb op-ed yesterday about a topic that quite frankly, I never thought would be brought to the fore of discourse.
It has always amazed me — when did members of congress become experts in graphics processing units while having a senior role in the senate? Does it have any correlation with classified intelligence briefings received about the critical defense requirements for specialized chips that happen to be good at training AI and deep neural nets? I dunno.
What I do know is that it’s startling when two of my friends, with minimal experience in the stock market, say they just mimic the portfolios of certain senators. And more power to them, because that strategy works.
When I was a trader at Goldman Sachs, we were trained on what is considered advance information and why we shouldn’t trade on it with a 10 foot pole.
But what I didn’t appreciate until my brief stint at LedgerX was the government side of things. So here’s the obligatory crypto story.
7 years ago, I traveled regularly to Washington DC to talk about this obscure topic called Bitcoin with government regulators. While some will assume this was exclusively with a certain regulatory body we worked with, it actually spanned Treasury, the SEC, and others.
In one of these closed door meetings, there were contours being discussed of what we were trying to do, regulation wise, with crypto. Fortuitously, in one of these preliminary meetings, there was a young gentleman who had actually bought 1 Bitcoin (back then, worth less than $100. Yes, yes, things have changed).
It’s hard to believe now but it was a minor miracle in 2015 that anyone in the government had purchased crypto. It wasn’t easy to do so back then, and we certainly didn’t expect anyone in the government regulatory sphere to have done so. Fantastic, finally someone who spoke our language and could appreciate what we were doing.
He was barred from any other meeting regarding our regulatory application afterwards. Conflict of interest. He after all, owned 1 BTC and shouldn’t have any visibility as to market moving events.
So we had a situation where literally the only person in this entire regulatory apparatus that had experience with crypto was taken off our application. I do not want this taken the wrong way — I have considerable respect for the rigor of the government’s conflict of interest rules here.
But at the same time, this staffer lost significant visibility about the discussions and the pace of our regulatory approval. That’s fine and appropriate.
Our lobbyists and former government advisors, on the other hand? They had complete visibility as to what was about to happen. And yes, that information is valuable. Is that equitable and fair? Well, it doesn’t sit right with me.
But what the heck do I know. Either way, I’m glad this topic is being discussed.
