After taking a turn as top financial cop under former President Donald Trump's previous administration, Jay Clayton has been tapped by the president-elect to serve as Attorney for the Southern District of New York.
Clayton, nominated on Thursday, previously served as chair of U.S. Securities and Exchange Commission from 2017 to 2020. The Southern District of New York has handled a variety of high profile crypto cases, including against former FTX CEO Sam Bankman-Fried. The news was first reported by Reuters.
"I am pleased to announce that Jay Clayton, of New York, the Chairman of the U.S. Securities and Exchange Commission during my first term, where he did an incredible job, is hereby nominated to be the U.S. Attorney for the Southern District of New York," Trump said in a post on Truth Social. "Jay is a highly respected business leader, counsel and public servant."
Clayton led the SEC through the initial coin offering boom of 2017-18, during which time his office filed a number of high-profile lawsuits against prominent and lowly crypto projects. Notably, the securities watchdog filed enforcement actions against Kik and Telegram that hampered the messaging apps' crypto efforts.
The former SEC chair also denied every application for crypto exchange-traded funds and right before leaving his post, filed charges against Ripple. In 2020, the SEC accused the firm of raising $1.3 billion through the sale of XRP, which the agency says is an unregistered security. The case is ongoing after a New York judge gave both parties a partial win and both have filed appeals.
Clayton, a former Sullivan & Cromwell attorney and Federal Reserve advisor, was chair when the DAO Report was released in July 2017, which examined the infamous decentralized autonomous organization (i.e. "The DAO") that caused Ethereum to rollback the chain to recover stolen funds. The report set the precedent for treating crypto assets issued by ICOs as securities.
On Wednesday, Clayton told a group of securities lawyers in New York that crypto legislation was likely incoming and said he would be in favor of alleviating "regulatory burdens" to motivate companies to go public, Reuters reported.
During prepared remarks on Thursday, SEC Chair Gary Gensler drew similarities between him and Clayton, noting that both of them said bitcoin was not a security. Gensler also said that Clayton had brought about 80 actions against people and firms in crypto.
It is unclear whether Gensler has a future at the agency as Trump has said he would fire the leading commissioner "on day one." Sources have said it is likely Gensler would step down as other chairs have done in the past. Gensler could decide to stay on at the SEC as a commissioner.
"His Commission and he spoke often about these markets, starting in his third month in office when the Commission put out the DAO Report," Gensler said. "The SEC has continued that vigilance to ensure that those offering or selling securities comply with our time-tested securities laws."
Apollo Global Management appointed Clayton as lead independent director on its board, a newly created role, following his SEC tenure. He also rejoined Sullivan & Cromwell as a senior policy advisor and took on advisorship roles at crypto firms Fireblocks and One River.
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