Former SEC Chairman Advises Bitcoin-Oriented Hedge Fund on Crypto

Investment manager One River Asset Management, a $2.5 billion firm, hired former Securities and Exchange Commission (SEC) chair, Jay Clayton, as an adviser to its crypto-oriented subsidiary One River Digital Asset Management.

Clayton served as SEC Chairman under the Trump administration from May 2017 until the end of 2020. During his tenure, the SEC blocked several attempts of various funds providers to launch Bitcoin exchange-traded funds (ETFs). Nevertheless, the financial watchdog decided that Bitcoin and Ether – the two largest cryptocurrencies by market cap – were not securities, which left the door open for a wider adoption among institutional investors.

Now Clayton is advising the crypto fund backed by hedge fund billionaire Alan Howard and is supporting the digitization of the monetary and capital ecosystem.

One River’s Advisory Council Also Include Former Trump and Clinton Administration Officials

One River Digital has recently formed the Academic and Regulatory Advisory Council to lead its crypto investment efforts. Besides Clayton, it also includes Kevin Hassett, former chairman of the Council of Economic Advisers under President Donald Trump, and Jonathan Orszag, who worked in the Clinton administration.

The new council will help One River founder and CEO Eric Peters, who embraced digital assets at the end of last year. He raised funds from Howard and Ruffer LLP to buy Bitcoin and Ether through his crypto-oriented subsidiary.

Clayton said that he enjoyed discussing cryptocurrencies from the other side of the table and admitted that he would have never predicted that digital assets would be embraced by respected investors so quickly. He said:

“The digitization of our financial ecosystem isn’t just is coming, it’s already here. Three years ago, I didn’t believe we would be where we are today — the number of respected investors who have embraced digital assets. I would not have predicted this level of take-up.”

One River has been purchasing Bitcoin since November last year, when the price was at around $15,000. Last November, it conducted one of the largest public transactions with the cryptocurrency, as the hedge fund amassed $600 million in Bitcoin.

SEC Commissioner Worried About Regulator’s Though Stance on Pending Bitcoin ETFs

While the SEC has been harsh on initial coin offering (ICOs), Bitcoin ETF applications, Ripple’s XRP distribution, and the crypto market in general, not all staff members are crypto-averse. For example, SEC Commissioner Hester Peirce has openly expressed her support for digital assets on several occasions. The crypto community even nicknamed her “Crypto Mom.”

Yesterday, she told Forbes that the SEC was late with the approval of a Bitcoin ETF, which has its consequences. Peirce said:

“My view has been that we’re overdue on approving one of these things. I also think we’ve dug ourselves into a bit of a difficult hole by setting standards for approval that are difficult to figure out how to satisfy.”