Kathy Kraninger is the latest former Trump administration
official to land in the booming digital currency industry as it
beefs up on legal expertise and Washington connections amid
increasing regulatory scrutiny.
Founded in 2017 by former Goldman Sachs employees, New
York-based Solidus Labs provides cryptocurrency trading
surveillance and risk monitoring tools. Its backers include
private equity firms Evolution Equity Partners and Hanaco
Ventures.
Kraninger will lead and build out Solidus Labs' regulatory team,
spending most of her time working with regulators, U.S.
lawmakers and traditional institutions to explain how digital
markets can be effectively policed, she said in an interview.
Her career in government, including helping to set up the
Department of Homeland Security and leading the CFPB from 2018
to 2021, positions her to contribute to a growing debate in
Washington over how to regulate cryptocurrencies, she said.
"Bringing the expertise that I have from how federal regulators
think, state regulators think ... it just seemed to be a
fantastic fit," said Kraninger.
Solidus Labs has built software to monitor crypto markets and
help investment firms and other clients screen for manipulation,
bad actors and meet compliance obligations. Its clients include
crypto exchange Bittrex and Rialto Markets.
The ability to monitor cryptocurrencies has become a major worry
for regulators as the ballooning market, which reached a record
$2 trillion capitalization in April, has experienced wild
volatility.
In June, the Securities and Exchange Commission (SEC) again
delayed approving a bitcoin exchange traded fund and sought
feedback on the risks of market manipulation.
This month, Senator Elizabeth Warren called for increased
cryptocurrency oversight, while Treasury Secretary Janet Yellen
told regulators they must quickly establish rules for digital
coins linked to fiat currencies, known as stablecoins.
Regulators worry the cryptocurrency market is unstable, opaque
and systemically risky.
"We've had overwhelming interest from regulatory entities
globally," said Solidus Labs Chief Executive Asaf Meir. "We
needed someone who brings in the right experience."
Crypto and fintech companies have been snapping up former Trump
regulators. Former bank regulator Brian Brooks was appointed
Binance's U.S. CEO in May, while Chris Giancarlo, former chair
of the U.S. derivatives regulator, is an investor in Solidus and
founded the Digital Dollar Project which advocates for U.S.
policymakers to develop a digital dollar.
(Reporting by Pete Schroeder; Editing by Richard Chang)
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