For years now, too many leaders on Wall Street and Washington either looked the other way or blindly supported the crypto industry as it worked relentlessly to infiltrate our financial system and rewrite the laws and rules to benefit their special interests. This was all greased by tens of millions of dollars in campaign contributions and lobbying, including by too many former public officials selling out their public service and engaging in influence peddling.
Leaders (including regulators at the CFTC, elected officials in Congress, and blue-chip venture capital firms) who should have known better simply accepted the pixie dust of “innovation,” the fairytale of crypto riches, and FTX founder Sam Bankman-Fried’s claimed “vision.” They did so without doing the most basic due diligence or asking the most obvious questions if they thought it would make them rich or were already on FTX’s payroll directly or indirectly. (Better Markets refused FTX’s bribe of “$1 million or more” to support their radical and dangerous efforts to undermine consumer, investor and financial stability protections. Although that would have funded more than 25% of our annual budget, we stayed independent, clearly saw FTX’s troubling business plans and proposals, and aggressively opposed them at the CFTC and across Washington.)
The crypto industry followed the financial industry’s standard playbook of using all the levers of the influence industry to buy access and special treatment for its special interests at the expense of the public interest. One of the most corrupt aspects of that, which FTX used extensively, is a revolving door strategy of hiring former government officials, especially from the CFTC, to buy their unique inside knowledge, special access, and unfair influence at the agencies, in Congress and all across Washington to move FTX’s agenda.
Better Markets has stood against the crypto tidal wave of money, stood up to FTX’s powerful supporters (including at the CFTC and in Congress), asked the tough questions (including of Sam Bankman-Fried directly in our conference room), and aggressively opposed the crypto industry’s radical and dangerous proposals.
In addition to the materials below, we held a “Crypto Week of Truth” from July 17-21, 2023 to shed light on the industry’s failed promises and track record of lawlessness, deception, fraud, and investor losses. Each day featured original content and analysis examining the fundamental issues surrounding crypto. Find the content from Crypto Week of Truth here.
Key Materials
Bloomberg TV: Dennis Kelleher Talks SBF, Lawless Crypto Industry, & the 2024 Campaign on Bloomberg Crypto (4/2/24)
Bloomberg TV: Dennis Kelleher on Why Bitcoin ETFs Will Harm Investors (1/11/24)
Dennis Kelleher Discusses FTX and the Future of Crypto on CNN (11/16/22)
Op-ed: Congress must ask tough questions about crypto industry favored legislation (6/11/24)
Release: The SEC’s approval of spot Ether ETPs endangers investors and financial stability. (5/23/24)
Memo: We outlined why SBF deserves a very long sentence for his egregious crypto crime spree. (3/26/24)
Comment Letter: Our team opposed ether-based ETPs (1/12/24)
Read our Statement on the SEC’s approval of Bitcoin ETFs (1/10/24).
Comment Letter: Better Markets opposed Bitcoin ETP applications and the potential danger they could cause to investors and the entire financial system. (1/5/24)
Fact Sheet: Our fact sheet argues that Congress must carefully consider the track record of stablecoins, and their impact on the financial system before adopting measures that would legitimize this dangerous corner of the crypto market. (5/17/23)
Report: In a examination of the SEC’s work on crypto, our team details the facts of what the #SEC has actually done and why it has been as effective as possible under the circumstances. (1/24/23)
Blog: Our team examined the stunning impact of the revolving door between the CFTC and FTX. (12/26/2022)
Letter to Senate Agriculture Committee: We raised numerous concerns over an FTX endorsed crypto bill that would jeopardize investor, consumer, and financial stability protections. (1/10/23)
Fact Sheet: Before the Senate Agriculture hearing on a crypto bill that was FTX’s main priority, we asked the CFTC and Members of Congress to consider 10 key questions about the legislation. (11/30/22)
Press Release: We called for an investigation of the CFTC’s FTX Failures and push for crypto-friendly legislation (11/15/2022)
Press Release: Our statement criticized the CFTC for failing to properly regulate or supervise FTX (11/14/22)
Selected Media
New York Times: How Crypto Money Is Poised to Influence the Election (6/17/24)
“A single relatively small industry is literally trying to buy enough politicians to hijack the public agenda,” said Dennis Kelleher, the president of Better Markets, a financial reform advocacy group. “It’s pretty breathtaking.”
New York Times: U.S. Approves Investment Product Tied to Popular Cryptocurrency Ether (5/23/24)
“Federal regulators on Thursday approved an investment product tied to the cryptocurrency Ether, the most valuable digital asset after Bitcoin, in a major boost for the crypto industry. …
‘The S.E.C. failed to live up to its mission to protect investors and the markets,’ Benjamin Schiffrin of Better Markets, a nonprofit that fights for stricter financial regulations, said in a statement.
Bloomberg: Trump Mugshot NFTs Highlight Crypto’s Arrival on Campaign Trail (5/16/24)
“To Kelleher, at the crypto-critical Better Markets group, there’s another meaningful number of people to consider: All the voters who have been turned off by the long list of crimes and scandals associated with the asset class.
‘It’s hard to believe that there are going to be many people who conclude that voting in favor of a bunch of criminals and predators is somehow in their interest,’ he said.”
Wall Street Journal: Founder of Binance, World’s Largest Crypto Firm, Sentenced to Four Months(4/30/24)
“He and a bunch of others at Binance should have been charged with substantive violations, not what is a minimalist charge almost akin to a record-keeping violation,” said Dennis Kelleher, head of Better Markets, a group that advocates for tougher financial regulation.
Politico: Crypto’s next frontier (4/3/24)
“Asset management giant BlackRock recently launched its first tokenized fund and invested in the firm that’s helping run it. The private fund, known as BUIDL, aims to maintain a stable $1 share price through its investments in cash, U.S. Treasury bills and repurchase agreements. The twist is that BUIDL shares will be represented by tokens on the Ethereum network, with yields accruing in investors’ digital wallets.”
“Perhaps they [tokenization advocates] will harness blockchain for good—notwithstanding its use so far as the foundation for the crypto craze, which has created nothing of real value other than a tool favored by speculators, gamblers and criminals,” Better Markets legal director and securities specialist Stephen Hall said. “But because this application of technology has a limited track record in anything resembling legitimate finance, it needs to be closely monitored and regulated because serious risks to investors and the financial system could well emerge. Time will tell.”
Financial Times: Crypto lobbyists are on manoeuvres — and we should be worried (3/28/24)
“And this week Dennis Kelleher, head of Better Markets, another non-profit, and crypto critic, wrote that ‘a crypto industry dark money group . . . with the Orwellian name ‘Fairshake’ raised nearly $80mn in just the last three months of 2023’. Kelleher says this is being used to attack politicians who have expressed reservations about crypto, such as the Democrat senators Elizabeth Warren and Sherrod Brown. Indeed, the campaign has already helped to knock out one anti-crypto voice, Katie Porter, who recently lost a Californian primary.”
Bloomberg: Crypto Titans Threaten to Unleash War Chest on Hostile Lawmakers (3/15/24)
“They know the public views crypto like kryptonite – it turns off more voters than it turns on,” said Dennis Kelleher, president and chief executive officer of Better Markets, a group that pushes for greater market oversight. But “you can bet that wherever crypto spends a penny, they will claim they have influenced the outcome and expect the winners to pay them back.”
WSJ: How Bitcoin Made a Believer Out of BlackRock (3/10/24)
Dennis Kelleher, president and CEO of Better Markets, a group that advocates for oversight of the financial sector, said it is no surprise that BlackRock is quickly becoming a market leader in bitcoin.
“BlackRock has an unmatched market penetration with a peerless distribution network and a marketing powerhouse,” he said. “All of these attributes provide Main Street investors with false comfort.”
Bloomberg: Bitcoin Funds Set New Precedent for Crypto 401(k), IRA Investing (2/12/24)
“One of the big issues we have with the approval is that it allows bitcoin to be presented to investors in a better way, even though it has the same risk, just in a different package,” said Ben Schiffrin, director for securities policy at Better Markets.
Reuters: US SEC approves bitcoin ETFs in watershed for crypto market (1/11/24)
CNBC: Mysterious crypto ‘dark money’ group ramps up lobbying efforts ahead of 2024 election (1/8/24)
“What we’re going to see in 2024 is a massive ramp up in crypto-funded ‘dark’ money campaigns against anybody who isn’t a crypto shill,” Kelleher said. “By the end of the year, when it’s all added up, I think the crypto industry is going to put hundreds and hundreds of millions of dollars in trying to defeat people who want to actually represent the voters, rather than represent crypto.”
Politico: A bitcoin breakthrough (1/4/24)
In Morning Money Dennis Kelleher tells Declan that approval will give the crypto a veneer of legitimacy despite its record of criminality & lawlessness.
American Banker: FDIC draws bright line between insured and uninsured (12/22/23)
“The FDIC deposit insurance is the gold standard for trust, confidence, and protection, which is why too many in the crypto industry want to misleadingly if not falsely suggest to crypto investors that their money is protected by the FDIC. That false comfort not only harms investors, but also the insurance program, insured banks, and the broader banking system as people lose faith in the FDIC [and] that’s what today’s rule aims to stop.”
Associated Press: Regulators and law enforcement crack down on crypto’s bad actors. Congress has yet to take action (11/22/23)
“The lawlessness if not criminal activities of crypto will continue and increase until all prosecutors, regulators and elected officials force the industry to act like all other law-abiding people and firms in the financial industry,” said Dennis Kelleher, president of Better Markets, a nonprofit that works to “build a more secure financial system for all Americans,” according to its website.
Atlantic: Is Crypto Dead? ( 6/17/23)
These digital assets are “pretty much only good for illegal activities, like money laundering, narco-terrorism, and tax evasion,” Dennis Kelleher, a co-founder of Better Markets, a nonprofit advocating for financial regulation, told me. “Is there social or public interest in enabling a financial product like that?”
New Yorker: “Washington Needs a Crypto Rethink” (12/20/22)
Kelleher told me that handing over primary regulatory authority to the C.F.T.C. would be a massive win for the crypto lobby. “The C.F.T.C. has been chronically underfunded, and it is easily penetrated and captured by an industry it is supposed to regulate,” he said. “FTX and other crypto firms wanted the weakest possible regulator, and that’s the C.F.T.C.”
Washington Post: Sam Bankman-Fried’s crypto empire imploded after a Washington charm offensive (11/14/22)
“Critics are now calling for a pause in Washington in the wake of FTX’s collapse. ‘We don’t need more legislation. We need more money and support for regulators to go after what is fundamentally a lawless industry,’ said Dennis Kelleher, the president of Better Markets, which advocates for tougher financial regulation. ‘We need elected officials to prioritize the public interest rather than campaign contributors and lobbyists.”
“No one should be shocked by FTX’s demise,” Kelleher wrote in a scathing statement released on Sunday. “The fiction of crypto was visible to all who wanted to see.”
New York Times: Inside Sam Bankman-Fried’s Quest to Win Friends and Influence People (11/22/22)
“FTX blurred the lines between corporate affairs and political activity, and prompted concerns among some involved about whether the money was being spent effectively and in compliance with strict campaign finance laws, while leaving some potential beneficiaries feeling like there was a quid pro quo.
“It was relentless and all-encompassing,” said Dennis Kelleher, the president of Better Markets, a nonprofit that fights for more regulation of financial firms.”
Dennis Kelleher Discusses Crypto Lobbying on Financial Times’ Tech Tonic Podcast (9/14/22)
The Financial Times Tech Tonic podcast covers the crypto lobby’s enormous influence in its series “A sceptic’s guide to crypto.” They spoke with our Dennis Kelleher about the stunning amount of money being spent and how it could impact our entire financial system.
The Atlantic: The Crypto Meltdown Could Have Been So Much Worse (11/12/22)
“Why is the contagion so limited? I asked that question of Dennis Kelleher, a co-founder of Better Markets, a nonprofit that advocates for financial regulation in the public interest. “The only reason we do not currently have a financial crisis, with a crash and with bailouts, is because regulators have withstood enormous pressure to allow interconnection and linkages between the crypto activities and the core of the financial and banking system.”
CNBC- Op-ed: FTX crash shows cryptocurrency market needs bank-like regulation (12/5/22)
by Dennis Kelleher and Rob Nichols, president and CEO of the American Bankers Association
“Our organizations don’t always agree on banking policy. But today, as the warning lights blink on the economic dashboard and we confront both persistent inflation and the risk of a recession in the months ahead, we both agree that crypto companies and other nonbanks pose a significant and increasing risk to our financial system that needs to be better understood and regulated.”
LA Times: A young crypto billionaire’s political agenda goes well beyond pandemic preparedness (8/12/22)
The FTX proposal would encourage speculation, rather than finding stable prices, said Dennis Kelleher, president of Better Markets, a D.C.-based think tank that focuses on accountability, transparency and fairness in financial markets. The proposal “removes a historic layer of protection that has worked extremely well,” Kelleher said. “The markets are going to be transformed in a way that the interests of actual producers and purchasers are going to end up subordinated to speculators and financial products.”
Dennis Kelleher Takes Part in Brookings Panel on Crypto (11/15/22)
During the panel, Dennis focused on the revolving door of the crypto industry and the need to prevent the lawless crypto industry from infecting the entire banking system and economy.
