How US regulators benefit from “friendship” with crypto companies

  • US regulators engage crypto industry representatives to work.
  • American regulators are ready to work with crypto companies on a paid basis.
  • Many market representatives willingly cooperate with regulators.

The digital asset market continues to evolve and penetrate the traditional financial system. The popularity of a new financial instrument makes the authorities look for solutions to control the crypto space. In the effort to explore the sphere many regulators turn to the industry for help.

If you got it, help the state!

The cryptocurrency market is built around the ideas of the formation of a decentralized economy. Central banks and other regulators do not fit into this system. Despite this, many participants in the crypto space, do not mind establishing mutually beneficial cooperation with representatives of the opposite camp. An example of this was the deal of the popular digital asset exchange Coinbase with the US Secret Service.

Brian Armstrong, CEO of the trading platform, has agreed to sell Coinbase Analytics, a crypto transaction tracking tool, to the American regulator. Participants in the digital asset market criticized the decision, but the developer tried to explain it as an attempt to compensate expenses for the creation of the program.

Notably, regulators got Coinbase Analytics for less than $ 50K a year. The parties signed a contract for 4 years. The Block analyst Larry Cermak drew attention to the fact that such a valuable tool went to the Secret Service at a ridiculous price. He is confident that Coinbase used the deal to improve relations with regulators before a possible initial public offering (IPO).

Against the background of the positive experience of the US Secret Service, the American Securities and Exchange Commission (SEC) also decided to use the knowledge of the crypto community. Representatives of the regulator published an announcement about the search for a contractor who would provide them with tools for monitoring smart contracts.

Previously, the SEC team has already concluded agreements on joint work with participants in the digital asset market. For example, the SEC used the service of the analytics solutions provider CipherTrace that delivered the tools to track transactions on the blockchain of the popular digital asset exchange Binance.

Simultaneously, the CipherTrace team collaborates with representatives of the cryptoindustry. The company’s relationship with regulators does not affect its position in the industry.

The Internal Revenue Service (IRS), in turn, decided to keep up with colleagues. The regulator also wants to buy tools to track anonymous transactions.

Perhaps, in the future, the positive experience of joint work of agencies with participants in the digital asset market will become a reason for concluding new partnership agreements.

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