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Former SEC Chair Jay Clayton Appointed as New SDNY Attorney by Trump
Jay Clayton, the individual behind the SEC lawsuit against Ripple, has been appointed by Trump as the new U.S. Attorney for the Southern District of New York (SDNY). Although Clayton has pledged to end crypto enforcement actions at the SDNY, his background includes initiating significant regulation against the cryptocurrency sector.
In addition, Trump aims to take advantage of a procedural loophole to sidestep a complicated confirmation process that Senator Chuck Schumer has promised to obstruct. This situation raises doubts regarding the cryptocurrency industry’s new political affiliations.
Jay Clayton’s Role in the Ripple Case
As President Trump has committed to promoting a more welcoming regulatory environment for cryptocurrency, part of that commitment involves instructing prosecutors to halt enforcement initiatives. Clayton was initially appointed to this role in November and has assumed the position of Acting Attorney as of today. However, a major concern arises from the fact that Clayton originally filed the SEC lawsuit against Ripple.
The SEC versus Ripple case has become a pivotal issue during the Gensler administration, but it was Clayton who set the legal ball in motion. Serving as the Chair of the SEC from 2017 until 2020, Clayton resigned just over six months before his term’s conclusion.
He initiated the SEC lawsuit on December 22 and promptly resigned the following day, a move described by Ripple as a “parting shot.” Now, Clayton finds himself positioned against the backdrop of government crypto regulations. When Trump appointed him last November, a spokesperson noted intentions to cease crypto enforcement actions.
In 2023, Clayton publicly criticized Gensler’s harsh regulatory actions during television interviews, a stance that sparked anger from Ripple’s CEO, Brad Garlinghouse.
Watching this clip makes my blood boil.
The hypocrisy is shocking. @CNBC @SquawkCNBC should be calling him out for the bullshit.
(As a reminder, jay clayton brought the case against ripple, me and Chris Larsen. And left the building the next day). https://t.co/xPV2bT2WnV
— Brad Garlinghouse (@bgarlinghouse) October 28, 2023
Controversies Surrounding the Confirmation Process
Although no representatives from Ripple have made comments regarding Clayton’s new role as of today, his appointment is likely to stir controversy within the community. The Senate confirmation process can be challenging, and Trump’s recent nomination of Paul Atkins for SEC Chair, who only took the seat five months later, illustrates this complexity.
Trump has named Clayton as the Acting U.S. Attorney for SDNY, with plans for a permanent appointment. Only last week did he submit Clayton’s nomination, but Senate Minority Leader Chuck Schumer has promised to oppose his confirmation, arguing that Clayton lacks “fidelity to the law.”
Nonetheless, Clayton is not required to undergo a confirmation vote to assume his position as Acting U.S. Attorney. In fact, he might avoid this altogether. If the Senate does not confirm him within 120 days, judges within the SDNY can appoint him until a nominee is confirmed, allowing for the possibility of Clayton serving a regular term without needing further nominations from Trump.
Reflection on Crypto’s Political Landscape
This situation serves as a stark illustration of the expanding influence of cryptocurrency in political dialogues. Jay Clayton, the individual who instigated the Ripple lawsuit, now finds himself in a role intended to combat future regulatory challenges. However, this raises questions about the reliability of previous adversaries within the industry. How dependable are these transitioning allies, and how many of today’s crypto proponents might pivot to enforcement roles tomorrow?
These are pressing concerns that resonate deeply within the cryptocurrency community.
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