CFPB

Ex-CFPB Director, Raj Date, Helps Cryptos Remain Compliant

Crypto Island

Raj Date, a former Consumer Financial Protection Bureau (CFPB) deputy director turned venture capitalist, is launching a new firm that will consult cryptocurrency and digital banking companies.

According to American Banker, FS Vector will focus on regulatory, legislative and compliance issues. In addition to crypto clients, the company will work with other FinTech companies, including robo-advisers, online lenders and digital-payment providers, as well as traditional banks.

The launch comes as lawmakers and federal agencies are struggling to figure out how to fit tech firms into the financial regulation framework. Last month, for example, the Securities and Exchange Commission’s (SEC) leading authority on bitcoin, cryptocurrency and initial coin offerings (ICOs) ruled that some well-known cryptocurrencies, like bitcoin and Ethereum, are not securities. However, the coins offered during ICOs very likely are entirely — or mostly — securities.

Volatile price swings, and concern over digital tokens being used for money laundering and other crimes, have also prompted the call for regulation. In addition, many companies wanting to shift their financial services into the digital era aren’t sure how to comply with government rules.

“There is a little bit of a disconnect, and there is a need to educate on all sides of this,” said John Beccia III, who is starting FS Vector with Date and will be its CEO. “We just want to make sure that we have the right level of regulation, the smart regulation, that will allow the businesses to flourish.”

Beccia was a former general counsel and chief compliance officer at Circle Internet Financial, a digital currency trading platform. John Collins, a former Senate aide and former head of policy for Coinbase, will be a partner.

Date helped launch the CFPB in 2010 with Senator Elizabeth Warren and was its first deputy director before leaving in 2013. FS Vector will be affiliated with Date’s venture capital firm, Fenway Summer Ventures.

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