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The Ladder Pull

We've all heard of the rug pull. Scammers get a bunch of people excited over some new offering, get a bunch of assets accumulated an then disappear into the night with everyone's stuff.

Coinbase proposing a new regulatory body for the oversight of crypto. Binance begging for regulation.  In newly forming markets that lack "oversight" and regulation, initial players gather the momentum and gain the primary benefits of being the initial market movers. Then, as pressure comes they become regulatory friendly - so long as they get a seat at the table, they'd love to discuss, help implement, shape regulation of this nascent industry. All because they want to work with the regulators than appear to be opposition.

This is what I'd call a ladder pull. First movers gain the benefits while pulling up the ladder behind them. This leaves potential future competitors with additional hurdles to overcome. And it'll all be couched in language that will focus on "protecting" consumers. Why? Because you can almost always sell regulators (and most consumers) on "safety".

The big names in crypto seem warming up to the regulatory bandwagon - willing to negotiate just how high they're going to pull that ladder up, leaving most of the grunts who designed and developed the market from which they benefit, on the ground.

This article was updated on 19 Nov 2021