Regulators choose Bitcoin: Why officials are moving into the crypto business

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Crypto hires its former watchdogs as regulation tightens

From regulators to crypto companies: A new market norm

On December 17, it was reported that Caroline Pham, acting chair of the Commodity Futures Trading Commission (CFTC), is moving to MoonPay to take on the roles of chief legal officer and chief administrative officer. This is not just a high-profile appointment, but a telling marker of how quickly the crypto market has begun to attract people from the very center of the US regulatory system.

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Pham is one of those figures. As acting chair of the CFTC, she was involved in shaping positions on digital asset derivatives and in coordinating with the US Securities and Exchange Commission (SEC), meaning she worked with the crypto market in its most sensitive regulatory areas. Her move to MoonPay fits logically with the demand from crypto payment services for strong regulatory and compliance frameworks at a time when fiat on-ramps are under increased scrutiny.

What is notable, however, is that Caroline Pham’s transition from the CFTC to MoonPay is more a symptom than an exception. Over recent years, the crypto industry has formed a steady talent pipeline from regulatory bodies into the private sector, and increasingly this involves people who not only monitored the market but directly shaped approaches to its oversight.

Previously, another CFTC commissioner, Summer Mersinger, left the agency to become CEO of the Blockchain Association, one of the key industry groups representing crypto interests in Washington. In effect, this marked a shift from shaping regulatory positions to directly influencing their future configuration from the market side.

A similar logic can be seen at the SEC. Former commission chair Jay Clayton joined the advisory board of Fireblocks, a company building institutional infrastructure for the custody and transfer of digital assets. He also became an adviser to One River Digital Asset Management and later to venture capital firm Electric Capital.

At the same time, former SEC and CFTC executives and lawyers have appeared in senior roles or on boards at companies such as Coinbase, Circle, Ripple, and Binance US — mostly in areas tied to regulatory policy, market structure, and compliance.

The trend extends beyond the US. Recently, Coinbase appointed former UK chancellor of the exchequer George Osborne as chair of its global advisory council, strengthening dialogue with governments on rules for crypto and stablecoins.

Why crypto companies want former regulators

The crypto market is rapidly converging with traditional finance, and compliance requirements are tightening accordingly. In practice, this means more KYC, AML procedures, sanctions screening, and internal risk policies. That is why crypto companies are increasingly bringing in people with regulatory backgrounds, most visibly at the operational level.

Companies operating at the intersection of fiat and crypto fall under the requirements of dozens of jurisdictions at once. For payment services like MoonPay, this translates into constant audits, shifting local rules, and dependence on decisions by banking partners. Former regulators help design processes so that the business can operate in a predictable mode even under differing regulatory standards.

Another reason for hiring ex-regulators is access to financial infrastructure. Banks and payment providers primarily assess crypto companies by how robust their risk controls are. Having executives with regulatory experience lowers the trust barrier and makes dialogue with partners more substantive. The ability to scale often depends on these partnerships.

The third reason is strategic. The crypto industry is moving not toward bypassing rules, but toward licensing and quasi-banking models. In 2025, cases are emerging where crypto companies receive preliminary or conditional regulatory approvals for models close to banking. This represents entry into an entirely different league, where there is simply no way in without people who understand supervisory logic from the inside.

Ultimately, ex-regulators in crypto companies are neither decorative figures nor political gestures. They are the industry’s response to a new phase of development, where scaling directly depends on how deeply the business is integrated into the rule-based system.

What this means for the crypto market

This trend is changing competitive dynamics across the industry. The advantage now goes not to those who launch products fastest, but to those able to operate stably across multiple jurisdictions and withstand partner and supervisory requirements. For investors, this is becoming a distinct quality signal: regulatory risk management is turning into the core of the business.

There is also a shadow side to this story that cannot be ignored. Even if rules are not formally violated, mass transitions from oversight bodies into the industry raise questions about conflicts of interest and trust in regulators. The mere fact that a person can move from a supervisory authority into a company they regulated yesterday almost automatically creates suspicion of uneven conditions. This is why many jurisdictions are increasingly discussing ethical restrictions and cooling-off periods — otherwise, the “revolving door” can easily turn into a corridor of privilege.

In the end, regulators moving into crypto companies signal that the industry has matured and entered a phase where the rules of the game are becoming part of the product. And on how transparently and evenly those rules work for everyone depends the main outcome: whether the crypto industry becomes a full-fledged part of the financial system or continues to live in a mode of constant regulatory conflict.

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