"Let me be completely unabashed about what I believe was happening. During the Biden administration, Sam Bankman-Fried and his crypto trading firm FTX pioneered what I call the “SBF strategy”. The SBF strategy is to go in front of congress, advocate for aggressive regulation, particularly industry-influenced regulators and licensors. The goal of the SBF strategy is twofold: direct regulation away from policy that harms incumbents and towards policy that harms competitors."
Great observation here, but this is not particularly new (although it may be to the crypto and AI spaces). This is, unfortunately, a fairly common business practice in many industries, and is usually considered part of "regulatory capture" (where a regulatory agency prioritizes the interests of the industry its regulating). Often, a regulatory agency is 1) staffed with ex-industry folks, which makes some sense, practically, because they're familiar with it, 2) the regulatory agency seeks input from the big players in the industry and uses that input as a guiding light (or alternatively, take bribes and do the big players' bidding), and 3) assumes/pretends good faith by those big players. What usually happens is similar to the "SBF strategy" - the industry giants convince a regulatory agency that costly regulation is needed - which, conveniently, only the big players can afford - which has the intended by-product of driving competitors out of their space, because start-ups can't, for instance, pay for a giant compliance team or the consulting fees or whatever to comply. The big players take a hit to their expenses, but get threatening, fresh players out of the market.
"Let me be completely unabashed about what I believe was happening. During the Biden administration, Sam Bankman-Fried and his crypto trading firm FTX pioneered what I call the “SBF strategy”. The SBF strategy is to go in front of congress, advocate for aggressive regulation, particularly industry-influenced regulators and licensors. The goal of the SBF strategy is twofold: direct regulation away from policy that harms incumbents and towards policy that harms competitors."
Great observation here, but this is not particularly new (although it may be to the crypto and AI spaces). This is, unfortunately, a fairly common business practice in many industries, and is usually considered part of "regulatory capture" (where a regulatory agency prioritizes the interests of the industry its regulating). Often, a regulatory agency is 1) staffed with ex-industry folks, which makes some sense, practically, because they're familiar with it, 2) the regulatory agency seeks input from the big players in the industry and uses that input as a guiding light (or alternatively, take bribes and do the big players' bidding), and 3) assumes/pretends good faith by those big players. What usually happens is similar to the "SBF strategy" - the industry giants convince a regulatory agency that costly regulation is needed - which, conveniently, only the big players can afford - which has the intended by-product of driving competitors out of their space, because start-ups can't, for instance, pay for a giant compliance team or the consulting fees or whatever to comply. The big players take a hit to their expenses, but get threatening, fresh players out of the market.
A helpful and more bipartisan perspective...on regulation