Former SEC Chairman Jay Clayton Joins $ 2 Billion Bitcoin and Crypto Custodian

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Former SEC Chairman Jay Clayton

Jay clayton

Former Securities and Exchange Commission Chairman Jay Clayton joins Fireblocks, a $ 2 billion Israel-based cryptocurrency custodian that focuses on institutions as an advisor.

The appointment represents the second crypto-focused engagement for the former regulator, following his March 2021 appointment to the board of directors of One River Asset Management, which recently filed for a carbon-neutral Bitcoin ETF with the SEC. .

At Fireblocks, who will be the first pure crypto institution on their resume, Clayton will help guide the company through the changing legislative landscape in the United States and abroad, and help develop the overall security posture for the fast growing company.

The company has grown from 100 clients to 500 in a matter of months in industries such as crypto trading, crypto retail, and traditional financial institutions. Since its inception in 2019, Fireblocks has acted as a custodian of over $ 1,000 billion in digital assets. Additionally, with a focus on large institutions, Fireblocks is the type of company one would expect Clayton to join after his tenure at the SEC, which took a conservative and risk-averse stance. vis-à-vis the growing crypto industry while being open to the potential of blockchain. technology to increase the transparency and efficiency of the financial system.

I’m very optimistic about the ability of blockchain and other technologies to remove friction in the system, Clayton says. You will achieve better and more secure transfer and custody as we integrate blockchain technology into our financial ecosystem.

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The growth of Fireblocks has gone hand in hand with an overall industry maturation and rise in valuations which has seen the price of bitcoin reach an all-time high above $ 64,000 and the total market cap of all crypto assets. exceed $ 2 trillion. However, he faces many hurdles ahead.

Aside from bitcoin and ether, the SEC has yet to make a final decision on whether other native digital assets such as NFTs and DeFi tokens are in fact securities.

With the uncertainty surrounding the classification of many digital assets lingering, Clayton says Fireblocks is ready to respond to any impact on the 700 assets supported by the platform.

I know it [Fireblocks CEO Michael Shaulov] and his colleagues are committed to respecting the regulations, he said. So to the extent that the SEC determines that certain digital assets that trade on platforms are in fact securities and should be regulated accordingly, I certainly understand that.

Still, some industry insiders and outside observers may find Clayton involved in yet another surprising crypto venture given the SEC’s cautious approach to the burgeoning industry under his tenure. In fact, many crypto observers and advocates were encouraged when President Biden appointed former CFTC chairman Gary Gensler to succeed Claytons, as he had testified positively on blockchain before Congress and even taught course on the subject at the Massachusetts Institute of Technology. However, Clayton is happy with the way the SEC handled crypto during his presidency.

What people need to understand is that the authority of the Commission is defined by law and promulgated regulations, Clayton adds. The men and women on the board do a very good job of matching these obligations with the advent of digital securities offerings and letting people know that digital securities offerings and trading must follow the same rules as the digital securities offerings. traditional paper-based securities trade, which by the way has become in many functions largely digital in itself.

He also highlighted the ways in which the regulator seeks to move the industry forward.

One of the last things the Presidents’ Task Force did while I was at the SEC was a report on stablecoins, stablecoin considerations, including when stablecoins would not be securities. , and continuing this type of interagency work would be useful for our overall financial ecosystem, he says. I hope that progress will continue.

Finally, by signing up for his second crypto-related venture, Clayton is fostering a trend of former officials and regulators who have engaged with the industry after moving into the private sector. Recent former regulators who have joined the growing industry include Ben Lawsky, who went from being New York State’s first superintendent of financial services, setting rules on crypto licensing, to advising Bitcoin funds.

Clayton was also predeceased by former Commodity Futures Trading Commission chairman J. Christopher Giancarlo, who went from regulating the classification of digital assets to writing a brief on behalf of Ripple, the largest holder. of XRP, which is currently sued by the SEC in December 2020 over an alleged sale of unregistered securities for $ 1.3 billion. He is also a co-founder of the Digital Dollar Project, an initiative that aims to promote research on the creation of a sovereign digital currency in the United States.

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