• Clayton told Blockworks his primary role as a member of the advisory board is to help the company and its customers understand how these new digital solutions and investment opportunities best fit within existing market infrastructure, processes and regulations
  • With regards to the government adopting digital assets, Clayton said that the government will have to look at the function that crypto-assets are providing and “they will be regulated in the same way as the incumbent assets that serve a similar function are.”

Institutional digital asset custody company, Fireblocks, has announced that former US Securities and Exchange Commissioner Chairman Jay Clayton has joined the company’s advisory board. 

Clayton has over three decades of experience in international financial markets and served as the chairman from May 2017 to December 2020.

“I’ve spent a fair amount of time over my career looking at the infrastructure in the capital markets space and watching past developments. If you look at the move to decimalization in the trading of equities, if you look at the move to digital processing that’s now going on in fixed income trading, this is just another piece of that evolution, and it’s interesting to have a front-row seat for that,” Clayton told Blockworks in an interview. 

His appointment will help guide Fireblocks “on navigating requirements for the support, development and deployment of solutions for the emerging digital asset infrastructure,” the company said. 

Since launching in June 2020, the Fireblocks Network has amassed over 500 participants who actively move assets across 30 of the world’s largest digital asset exchanges, such as Binance, Bitfinex, Coinbase, FTX and more.

“I share Fireblocks’ view that this type of digitization is going to come to many of our processes, it’s going to enable new products, like some of the crypto assets you see, but it’s also going to add efficiencies and resiliency to more traditional forms of finance,” Clayton said. “When you have a new technology and the technology gets exciting, if it can satisfy the regulatory objectives at least as well as the incumbent technology, and if it can do so in a better way, then you’ve really got something,” he said.

All in all, Clayton told Blockworks his primary role as a member of the advisory board is to help the company and its customers understand how these new digital solutions and investment opportunities best fit within existing market infrastructure, processes and regulations.  

Clayton’s thoughts on SEC adoption of cryptocurrency

In regards to the government adopting digital assets, Clayton said that the government will have to look at the function that crypto-assets are providing and “they will be regulated in the same way as the incumbent assets that serve a similar function are.” 

“It only makes sense in our global financial infrastructure for that regulatory coherence to stay in place,” he said. “I’ve long said that the new technology should not cause us to change the fundamental protections in our securities markets,” he added. 

Earlier this month, the current SEC Chairman Gary Gensler said that though he believes blockchain technology could continue to be a catalyst for change in the fields of finance and money, he warned against industry players working outside of regulatory frameworks, Blockworks previously reported

During the virtual Aspen Security Forum on August 3, Gensler laid out some of the “significant gaps” in investor protection that the SEC will be looking to crack down on when it comes to various crypto platforms. 

“In this digital, scarce speculative asset of bitcoin and others, we just don’t have enough investor protection, and frankly, at this time, it’s more like the Wild West,” Gensler said.

Separately, since the first bitcoin ETF application was filed eight years ago (and rejected), there have been over 12 applications sent in to the SEC, with more recent notable companies like Valkyrie and Wisdom Tree requesting for approval. 

But the SEC’s hesitation in approving a bitcoin ETF is not stopping issuers from filing to launch them. In late July, Global X, a New York-based fund group with more than $37 billion in assets under management across more than 80 ETFs, filed for an ETF, according to a July 21 SEC disclosure, Blockworks previously reported.

In general, Clayton also said he expects crypto-assets will be subject to the same Anti-Money Laundering, Know Your Customer, and Bank Secrecy Act types of requirements that international wire transfers are subject to. 

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  • Jacquelyn Melinek is a Houston-based reporter covering digital asset funds and markets. She previously reported on energy markets for S&P Global Platts and Bloomberg News and is published in over 65 news outlets. She graduated from the University of North Carolina at Chapel Hill with a degree in Media and Journalism.