Crypto’s revolving door: Ex-CFTC Chairman Giancarlo joins Baton Systems

Rick Steves

Mr. Giancarlo is also co-founder of the Digital Dollar Project that lobbies in favor of a U.S. central bank digital currency.

Baton Systems has appointed former CFTC Chairman J. Christopher Giancarlo as Senior Advisor for the provider of post-trade solutions for capital markets.

His background will play a key role in supporting Baton’s mission to transform the post-trade payments and settlements ecosystem.

Baton was founded in 2016 with a mission to reform payments by delivering on-demand synchronization and orchestration of asset movements through its distributed ledger-based platform.

The goal is to eliminate friction to speed up clearing and settlement, reducing risk and pre-funding requirements, and increasing liquidity. The firm works with major global banks, custodian banks, and exchanges.

The addition of ex-CFTC Giancarlo as senior advisor of Baton is another sign that the cryptocurrency ecosystem is doing its best to gain attention from regulators and their blessing.

Mr. Giancarlo was first nominated as a CFTC Commissioner by President Barack Obama and subsequently nominated as CFTC Chairman by President Donald Trump. He departed the CFTC in July 2019 following the expiration of his five-year term.

Arjun Jayaram, CEO and Founder of Baton Systems, commented: “We are honored to welcome Chairman Giancarlo to Baton’s Advisory Board. His tremendous contributions to the industry and advocacy for emerging technology will be critical as Baton continues to innovate and advance the capital markets experience for all market participants.”

J. Christopher Giancarlo, Senior Advisor at Baton, said: “Baton is solving some of the most pressing pain points in the capital markets post-trade process that have plagued the industry for decades and demonstrating the true value of leveraging modern technology to address these challenges,” said Giancarlo. “Baton is enabling a solution that is working today to improve the speed and precision of collateral management. I look forward to elevating this process further and joining Baton on a continued path to success.”

Mr. Giancarlo is also co-founder of the Digital Dollar Project that lobbies in favor of a U.S. central bank digital currency.

Other current roles include Chairman of the Board of Common Securitization Solutions LLC, a joint venture between Fannie Mae and Freddie Mac, and on the Advisory Board of the Chamber of Digital Commerce.

Mr. Giancarlo is Senior Counsel to the international law firm Willkie Farr & Gallagher and serves as an independent director of the American Financial Exchange, the sponsor of Ameribor and Ameribor Futures.

Prior to the CFTC, his career included serving as Executive Vice President of financial services firm GFI Group Inc. and Executive Vice President and U.S. Counsel of Fenics Software.

A large number of former regulators in the United States have joined the ranks of cryptocurrency firms as advisors or directors, including Larry Summers (Treasury) as advisor of Xapo, and Arthur Levitt (SEC) as director at Omniex and BitPay.

Sheila Bair (FDIC) joined as Omniex as advisor and Paxos as director, while Ben Lawsky (NYDFS) became director at Ripple. Coinbase appointed Juan Zarate (Treasury) as director, and Circle added Raj Date (CFPB) as director. Former CFTC Mark Wetjen and Bart Chilton entered LedgerX as director and OmegaOne as advisor, respectively.

In March 2021, Binance has announced former US senator Max Baucus as government liaison.

Having former regulators on the payroll may prove useful in stressful situations like Ripple Labs is facing. The creator of the XRP ledger hired former Securities and Exchange Commission chair Mary Jo White and her enforcement chief Andrew Ceresney to defend against the securities fraud lawsuit brought forth by the SEC in December 2020.

Even Ripple co-founder Brad Garlinghouse’s lawyer is Matt Solomon, who served as the SEC’s Chief Litigation Counsel. He recently stated that it could be “game over” for the whole case if the defense finds information suggesting the SEC thinks or thought XRP was akin to bitcoin or ether, which would be outside the scope of the SEC.

Coinbase has recently settled with the CFTC for false reporting and wash trading, having paid $6.5 million to the regulator.

CFTC Commissioner Dawn D. Stump has commented on the case against Coinbase and while, concurring with the regulator’s findings, she expressed her “serious concerns about the Commission’s dedication of resources to this matter involving an exchange for cash transactions in digital assets”.

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