XRP effect? Did Jay Clayton really just echo Ripple’s talking points?

Jay Clayton, the former Chairman of the Securities and Exchange Commission, doesn’t exactly have the coziest relationship with the crypto-community. While he was never very popular, what pushed his favorables down the drain was his last act in office – The SEC charging Ripple and its executives with illegal securities offerings.

Needless to say, the pushback from the community was vocal and vicious, with many like defendant Garlinghouse using the aforementioned lawsuit to suggest that the United States and its SEC weren’t tech-friendly and were dead set against innovation in the country. Curiously, while the price of XRP tanked immediately after the news broke out, on the back of small legal victories and the “us v. them” narrative gaining steam, both XRP and Ripple recovered.

In doing so, many believe the SEC now has egg on its face, with a recent Forbes article going as far as suggesting that the SEC, not Ripple, is on trial right now.

Clayton isn’t SEC Chair anymore, “crypto-friendly” Gary Gensler is. However, the former’s last act as Chair has new meaning with every new deposition and every new motion in the ongoing case.

Ergo, it was in this context of these developments that Jay Clayton’s latest Op-ed for Wall Street Journal came out of the blue.

Now, Clayton touched upon quite a few points here, including the logistics of the U.S introducing the Digital Dollar and cryptocurrencies being the “preferred method” for hackers (Clearly, Clayton isn’t aware of January’s Chainalysis crypto-crime report which found that while ransomware attacks rose significantly over the last year, illicit activities made up just 0.34% of all cryptocurrency transaction volume – Down from 2% the previous year).

What grabbed the most attention, however, was Clayton’s assertion – “Innovation is welcome absent some legal reason to oppose it.” What’s more, the former Chair of the SEC also conceded to the need for regulatory clarity and efficiency, while also touching upon the need for a proactive and coordinated approach to ensure the “leadership role” of the U.S financial market.

Now, read the aforementioned points carefully. These aren’t just mere arguments in an Op-ed. They are talking points, with each one of them sharing glaring similarities with what the likes of Ripple, its execs, and other industry representatives have said over the past year. In common parlance, Clayton seemingly took a u-turn, with the ex-Chair’s viewpoints now, impossibly, in alignment with the views of most in the crypto-community.

What might have precipitated such a reversal, however? Well, one can only speculate. Clayton’s present role as advisor to One River Asset Management may have played a role, perhaps.

A simpler explanation, however, can be that Clayton has finally recognized which way the wind is blowing. As highlighted previously, of late, it has been the SEC on trial, not the San Francisco-based blockchain firm. The fact that Judge Netburn had to order the SEC, twice, to turn over internal Bitcoin, ETH, XRP communications, only to have the agency ask for yet another extension, is a case in point.

In the words of many in the community, Clayton is finally “cornered.”

Ripple’s Brad Garlinghouse was one of those to comment on the same as well, calling out the aforementioned Op-ed and its observations as “ironic.” While the exec did say that it is better late than never, he was quick to add,

“Cryptos, like nearly any new innovative technology, can be used for good or bad purposes. The problem is that US companies seeking to be compliant and use this tech for good are left in limbo (or for Ripple, worse!) because of a lack of a clear, predictable framework.”

Ripple already has Mary Jo-White, Clayton’s predecessor as SEC Chair, in its corner. Right now, it would seem that Clayton himself might be siding with the defendants’ talking points too. What does this mean though? Well, probably nothing much.

What it will do, however, is fan talks of a settlement once again. When that might be, alas, is a question for another time.