Jay Clayton, the former chair of the SEC and recently appointed as the US Attorney for the Southern District of New York under Trump, previously initiated the SEC’s legal action against Ripple. While Clayton has pledged to halt crypto enforcement actions in his new position, he was also behind one of the most significant legal challenges in the crypto space.
Trump is maneuvering through a procedural loophole to sidestep a contentious confirmation process, which Senator Chuck Schumer has vowed to obstruct. This situation raises eyebrows regarding the integrity of new political allies in the cryptocurrency sector.
JAY CLAYTON AND THE RIPPLE LAWSUIT
President Trump has expressed a commitment to more supportive regulations for cryptocurrencies, including directing law enforcement to reduce enforcement activities.
Clayton was nominated for the role in November and has since taken on the position of Acting Attorney. However, there’s a pertinent issue—Jay Clayton was the one who filed the SEC’s lawsuit against Ripple.
The SEC versus Ripple case is seen as a pivotal litigation during Gary Gensler’s tenure, but it was Clayton who launched the suit. He helmed the SEC from 2017 to 2020 and resigned shortly after filing the complaint on December 22, a day before he stepped down, which Ripple characterized as a “parting shot.”
Fast forward a few years, Clayton finds himself on the opposite side of government actions against cryptocurrencies. When Trump appointed him last November, a spokesperson suggested that the office would put an end to crypto-related enforcement.
This year, Clayton has appeared on television criticizing Gensler’s enforcement strategies, drawing ire from Ripple CEO Brad Garlinghouse.
Watching this clip makes my blood boil. The hypocrisy is shocking.
FURTHER CONTROVERSY IN THE CONFIRMATION PROCESS
As of today, there have been no comments from Ripple regarding Clayton’s appointment, but it is likely to cause some discontent. The Senate confirmation process can be arduous for any nominee.
Trump offered Paul Atkins the SEC Chair position nearly five months ago, and it took him a while to step into the role. He is now taking a different approach with Clayton.
Reports indicate that Trump has named Clayton as the Acting SDNY US Attorney but intends for him to hold the position permanently. Trump has nominated him last week, despite Senate Minority Leader Chuck Schumer’s stated intention to block his confirmation, asserting that Clayton “has no fidelity to the law.”
Nevertheless, Clayton can serve as Acting US Attorney without a confirmation vote, and it’s likely that he won’t require one. If he remains unconfirmed for 120 days, judges in the SDNY can appoint him until a nominee is officially confirmed.
This means Trump does not need to nominate a different individual, allowing Clayton the possibility of serving a full term.
This situation exemplifies the political power that the cryptocurrency sector has accumulated. Jay Clayton, who instigated the Ripple lawsuit, will now be positioned to shape future regulatory enforcement. Yet, this circumstance raises questions about the reliability of former adversaries in safeguarding the industry. How trustworthy are today’s allies who once might have supported crackdowns? These dilemmas echo throughout the crypto community.
