This article caught my eye, and brought back some memories.
I think the realities of government regulators aren’t appreciated by people who don’t have to work with them.
There is a lot of pageantry with regulators and their associated hearings. Little substance, lots of bluster. But let me differentiate between two categories of regulators.
In my experience, the staffers are universally solid, hard working people. They are there no matter who the political appointees are, and carry on the mission as directed.
Political appointees are a different animal, and care quite a bit about their personal optics as they vie for pristine resumes and special “access” to parlay into lucrative private sector jobs after. Instead of a singular focus on executing and enforcing the law, most of all, they hate looking bad.
A quick story, from January 2019. It’s no secret I was open about criticizing the US government back then for moving so ponderously with bitcoin regulation. It was clear overseas exchanges were going to win, given what was happening.
One day, I got a call in my office from a government deputy. “We’re going to take your license away.” It came out of nowhere.
I was incredulous. Why, exactly? What regulation did we not comply with? There was absolutely no substantive answer — everything we had done was by the book, every I dotted, every T crossed. I learned that they were threatening this due to my blog post discussing our frustration with the regulators.
The message was simple — stop making us look bad, or we will make your life miserable.
And miserable it was. For the next 6 months, my team had to scramble and do completely unnecessary work, at the complete expense of building a good product and customer experience. It was bad for us, and bad for our customers. I had never seen such a thuggish move in my entire life from my own government.
I once had an advisor close to the government who knew that we were about to get our license, eager to ask whether I thought Bitcoin was going to go up after the announcement. Geez, that should show you the structure of incentives here. Things are changing a bit, thankfully.
What surprised me the most is the regulators had well funded, sophisticated “PR” teams that essentially have the writ to plant stories about companies and people they don’t like.
I always laugh when I think about this in retrospect — my taxpayer dollars at work. I used to think the government worked for the people, not for themselves.
But maybe I’m just old fashioned.
