SEC Counsel Berkowitz (CFTC) Resigns

[Borg Refinery]

https://twitter.com/x/status/1608128915972960259

A regulatory official who had previously dined with FTX founder Sam Bankman-Fried and his lobbyists has stepped down from his role at the Securities and Exchanges Commission.

SEC General Counsel Dan Berkovitz announced that he is departing his role at the agency effective Jan. 31, the agency said. Berkovitz was an ally of FTX within the financial regulatory agency and had meetings with SBF and other crypto lobbyists.

Principal Deputy General Counsel Megan Barbero will take over for Berkovitz upon his departure.

"After thirty-four years of public service, it is time for me to pursue new and different challenges and opportunities," Berkovitz said.

It comes after the Washington Examiner revealed Berkovitz cozy relationship with SBF and FTX thanks to emails obtained by the watchdog Protect the Public's Trust. “If ever there were a scene to conjure up a vision of a D.C. rigged toward corrupt insiders at the expense of the little guy, it would be difficult to top this one," Michael Chamberlain, director of Protect the Public's Trust, told the Washington Examiner. "Not long before its collapse and a raft of fraud charges, SBF and his gang were wooing one of their would-be regulators no doubt to try to manipulate the regulations to their advantage."

Bankman-Fried, FTX General Counsel Ryne Miller, and then-FTX President Brett Harrison met with Berkovitz at a luxury restaurant in Oct. 2021 amid discussions by the SEC and CFTC to determine the best methods for regulating cryptocurrency. While it is unknown what was discussed, the presence of Berkovitz at the dinner illustrates Bankman-Fried's efforts to schmooze lawmakers and regulators in D.C. and promote his view of crypto regulation.

SBF even presented FTX as the "natural choice" to be "umpires" of the crypto industry to Berkowitz in emails.

He also donated more than $40 million to Democratic campaigns and has said he also donated to GOP efforts.

The former crypto billionaire appeared in court for the first time on Thursday, facing an eight-count indictment from federal prosecutors in New York. SBF also faces charges from the SEC and CFTC after the collapse of FTX, alleging that the firm mishandled funds and engaged in deceptive conduct in its dealings with the partner organization Alameda Research.

It might be nice to kick the tyres on this as the story is mainly from right leaning news websites. But it does look to have legs. They may be exaggerating here though, as they tend to, so let's see what you guys can dig up on this?

 

[sear]

the story ... does look to have legs.

Totally.

I hope our government regulators understand:
- if they attempt to prohibit crypto, they'll not merely empower it but enshrine it for the duration of the prohibition.

- Conversely if they provide cautious but viable regulation, they'll have the practical means needed to control it.

I consider economics more complicated than rocket science and brain surgery combined. For one thing economics is a collective action issue. We may predict with useful accuracy the percentages of population spending response to market forces. But there's more to economics than that. Some of that seems counter-intuitive to me.

There were 8 economic depressions while the U.S. was on the gold standard, and none after the U.S. went off the gold standard.
economist Dr. Stephanie Kelton

I assumed the opposite, that having underlying $value would stabilize a currency. Not sure why not.
But that being the case, perhaps crypto-currency has as much or more potential as any of the more familiar denominations.

 

[titan]

Why did Berkowitz resign? From the detail here I don't know if Berkowitz resigned to avoid prosecution, or to free himself to participate in a money grab.