Former Head of Crypto-Skeptical SEC Gets Blowback for Pro-Blockchain Op-Ed

Former U.S. Securities and Exchange Commission (SEC) chair Jay Clayton is receiving criticism for a pro-blockchain op-ed he wrote for the Wall Street Journal.

In his piece, which was published Thursday, Clayton argued that the U.S. government needs to do more to harness the advantages of tokenization of assets via blockchain technology. For investors to pursue opportunities afforded by blockchain technology with confidence, they need assurance that they are protected by time-tested regulatory principles, he said.

His op-ed attracted some rather disparaging responses from commentators in the crypto community, given how his pro-crypto position differs from that which punctuated his reign as head of the SEC.

Clayton led the SEC during its crackdown on unregistered and fraudulent initial coin offerings. During his tenure, the commission also refused to approve the application of any exchange-traded funds, and sued Ripple Labs, saying it violated U.S. securities laws by selling XRP to retail consumers.

Ripple CEO Brad Garlinghouse responded to Clayton’s WSJ piece by tweeting: Siri, play Ironic by Alanis Morrisette. Ryan Selkis, founder of crypto research firm Messari, then retweeted Garlinghouse’s comment and called Clayton a shameless opportunist.

This view of Clayton is borne out of the numerous positions he has amassed in the crypto world since leaving the SEC at the end of 2020. Clayton is currently a senior policy advisor at Sullivan & Cromwell, a law firm that advises a number of firms in the crypto industry such as infrastructure provider Fireblocks, a firm which Clayton serves as a member of its board of advisors.

In March, Clayton also took on an advisory role at hedge fund One River Digital Asset Management, the parent company of the digital asset fund One River Digital. And in May, he was appointed non-executive chair of Apollo Global Management, an investment giant with an interest in blockchain initiatives.

In his op-ed, Clayton wrote that the government should actively facilitate the adoption of technology in core U.S. dollar funding and payments markets.

He described this as a matter of national security and financial stability, due to the importance of dollar primacy and stability to global economic development.

The government therefore needs to exploit its head start, Clayton argued, thanks to 95% of stablecoins being based on the U.S. dollar, meaning that it remains the preferred liquid store of value in digital asset markets. Clayton warned, however, that this could change.

One proposal he highlighted is to explore tokenizing the U.S. Treasury market to provide real-time trading, clearing and settlement of government bonds.

Read more: What’s the SEC Saying About Crypto?

Leave a Reply