From lending to payments to stock trading to crypto, prominent fintech businesses have found a competitive edge not in technology itself, but in using narratives about technology as a smokescreen for the profitable arbitrage of financial regulations. This modus operandi is encouraged by Silicon Valley’s venture capitalists, who decide which businesses to fund and often provide advice, gin up hype, and lobby for the businesses they’ve chosen. Our society continues to shower VCs with public subsidies, but as I argue in this brief post, if regulatory arbitrage is what we’re getting from Silicon Valley’s VCs in exchange, it’s well past time to reconsider this relationship.