Former SEC Chairman Jay Clayton finally joined Electric Capital as an advisor on its newly established Academic and Regulatory Advisory Council. Clayton's appointment will strengthen the firm's practices, according to the venture capital firm, which manages approximately $2.5 billion in assets and focuses on the cryptocurrency, web3, and fintech markets.
"By bringing together professionals in product design, the worldwide financial system, and regulation, the founders of Electric Capital are able to accelerate advancement and the adoption of web3 tools," the company said in a statement.
In addition to Clayton, the firm hired ex-Federal Reserve Board of Governors member Kevin Warsh and Pratiti Raychoudhury, vice president and chief of research at Meta Platforms Inc, to support Electric Capital.
Taking a stand on ethical issues
But what does the arrival of regulators mean for this fledgling industry? Attorneys in the cryptocurrency industry are questioning the ethical and moral dilemmas of government officials operating for the companies. They are supposed to regulate and provide public guidance to safeguard investors in cryptocurrency markets.
According to Bob Lamm, chair of the Securities and Corporate Governance practice at Florida's Gunster law firm, the appointments highlight a potential conflict of interest for the regulators.
"People don't really think about the ethical and moral component, but it's definitely there, "I believe that people working for regulators are using crypto as one of many political footballs because they are sort of shaping a future in the crypto industry that will be difficult with regulation," Lamm added.
Despite the fact that crypto companies have established the financial confidence and strength to hire experienced regulatory players, some entrepreneurs argue that the high-priced appointments will not bridge the gap in both traditional finance and crypto.
Last year, United States President Joe Biden named Gary Gensler as the new chairman of the Securities and Exchange Commission. Many expected his expertise in the field as a blockchain professor at MIT to help push for swift regulatory precision on digital assets and securities, but the sector remains hazy.