- In his term as the SEC chair, Jay Clayton did a lot, but to the cryptocurrency community, he’s the man who sued Ripple for violating securities laws with XRP sales.
- He has now joined Fireblocks, a digital asset service provider that supports hundreds of digital assets, and one of these is XRP.
In December 2020, just days before leaving the U.S Securities and Exchange Commission, Joseph “Jay” Clayton filed a lawsuit against Ripple Labs Inc., the company behind XRP, for securities violation. That lawsuit would lead to one of the biggest regulatory actions in the cryptocurrency industry and is still ongoing. Clayton has now joined Fireblocks, a $2 billion firm that caters to hundreds of digital currencies. The irony in it is that XRP is one of the cryptocurrencies that Fireblocks’ platform supports.
In his advisory new role, Clayton will work with the company on addressing customer needs and market structure. This will include deployment of Fireblocks’ security technology, the company announced August 19.
— Fireblocks (@FireblocksHQ) August 19, 2021
The former regulator commented:
I share Fireblocks view that digital asset custody requires the same level of service as traditional custody while also striving for better regulatory outcomes in security, certainty, and resiliency. I think the field of opportunities for bringing new technologies to our financial markets is amazingly wide and deep.
Fireblocks is an Israeli-based cryptocurrency custodian that focuses on institutional users. It has seen explosive growth in recent months, revealing that its clients have shot up from 100 to 500 in just a few months. Since it launched in 2019, it has processed over $1 trillion in digital assets. Less than a month ago, it raised $310 million at a valuation of $2 billion from firms such as Sequoia Capital and Stripes. Fireblocks boasts of major global firms as clients, including BNY Mellon, eToro, Revolut and Facebook’s Diem stablecoin.
“We will adapt if the SEC deems certain cryptos as securities”
For a leader under whose tenure the SEC went after a surprisingly high number of cryptocurrency companies, is Clayton concerned that Fireblocks could face the same fate? Not in the slightest, he commented.
“I know that Fireblocks CEO Michael Shaulov and his colleagues are committed to regulatory compliance. So to the extent that the SEC determines that certain digital assets that are trading on platforms are in fact securities and should be regulated accordingly, I certainly understand that,” he said.
Fireblocks has a lot of American clients and is certainly quite reliant on regulatory developments in the country. Clayton implied that the company would be ready to drop any cryptocurrency that is deemed a security, perhaps a show of his conviction that the SEC will win the battle he started against Ripple. After all, XRP was the only major cryptocurrency that he targeted while at the firm. In fact, it was under his leadership that one of the directors exempted Bitcoin and Ether from being labeled securities.
Clayton already works at One River Asset Management, a firm that very recently filed a Bitcoin ETF with the SEC (yet another irony as he rejected several Bitcoin ETF applications).
He joined the One River board of directors in March this year, barely three months since leaving the SEC. His appointment at the firm caused uproar in the XRP community who pointed out that he had led to the crashing of the XRP market, only to join a firm that fully backs the other two cryptocurrencies – Ether and BTC – that compete with XRP for market share.