(Bloomberg) — Former top securities regulator Jay Clayton sees existing U.S. regulations as a solid precedent for rules about cryptocurrencies.
Clayton — who spent several years as chairman of the U.S. Securities and Exchange Commission — is joining the advisory board of Fireblocks in the latest recruitment by a crypto firm preparing for greater government oversight. The company’s platform specializes in digital assets used for payments, gaming and non-fungible tokens, or NFTs.
“New technology should not cause us to change the fundamental protections in our securities and other financial markets,” Clayton said in emailed comments. In terms of crypto provisions currently in the U.S. infrastructure bill, “clarity around the taxation of digital assets is a good thing. A good place to start for that clarity is what function are those assets providing and should they be taxed like other assets that are providing that function.”
Regulatory interest in crypto has surged globally as prices have risen, and it’s being adopted more globally — both factors helping to fuel a rise in interest from regulators. Crypto firms like Binance and BitMEX have chosen people familiar with regulation for top jobs as they seek to navigate a world that’s moving from a “Wild West” to a more rules-oriented system. Fireblocks recently raised $310 million in a Series D round that values it at $2 billion, sealing its status as a unicorn.
“If you look at the financial sector today, the digitization of these processes will make traditional forms of finance more resilient and efficient,” said Michael Shaulov, chief executive office and co-founder of Fireblocks, in emailed comments. “Jay’s insights on market practices and regulations in finance will help our customers understand how these new digital solutions and investment opportunities best fit within regulatory objectives as well as the incumbent technology.”
As one illustration of how important governments may be for crypto going forward, the U.S. infrastructure bill’s crypto provisions took much of the industry by surprise. Despite efforts to get some of the language rolled back, many were left dissatisfied with the existing provisions.
“To the extent that a digital asset is a store of value, I would think about taxing it the same way you tax the purchase or sale of a similar store of value like, for example, gold,” Clayton said.
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