Crypto Startup Gives Advisory Roles to Ex-SEC, FDIC Chairs

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By Andrew Ramonas

Former Chairs Arthur Levitt of the SEC and Sheila Bair of the FDIC are helping guide a technology startup in California that is trying to facilitate cryptocurrency trading by institutional investors.

Levitt, who led the Securities and Exchange Commission from 1993 to 2001, and Bair, the Federal Deposit Insurance Corp.’s head from 2006 to 2011, have joined the advisory board of Omniex LLC, the company said Aug. 7. The firm, which has offices in San Francisco and Santa Monica, Calif., said it’s developed a “front-to-back office investment and trading platform” with help from $10 million in seed funding since it started last year.

The appointments come as regulators focus more of their attention on bitcoin and other crypto instruments, including initial coin offerings, which businesses use to raise money by selling digital tokens they create. SEC and Commodity Futures Trading Commission officials have filed more than a half-dozen cases and have issued numerous statements and other material on cryptocurrency since a first-of-its-kind SEC investigative report on ICOs in July 2017, according to Bloomberg Law’s ICO Developments Tracker.

“We’re in the nascent stages of a revolutionary, global asset class, but we’re also on the cusp of regulatory thinking on how to approach and regulate crypto assets,” Bair said in a statement.

Levitt added, “Institutional investors need purpose-built technology to solve the challenges they face today and equipped to handle the hidden obstacles they’ll encounter tomorrow in this new asset class.”

The former chairs have been active in the world of blockchain, the technology that underpins cryptocurrencies.

Bair serves on the board of directors of blockchain firm Paxos Trust Company LLC. Levitt advises crypto payments firm BitPay Inc. and bitcoin wallet company Blockchain Luxembourg S.A. (He also is a director of Bloomberg LP, which owns Bloomberg Law.)

It makes sense for crypto startups to turn to former regulators for help, Levitt told Bloomberg News this year.

“All new companies try to do that,” he said. “There’s nothing unique about cryptocurrencies.”

To contact the reporter on this story: Andrew Ramonas in Washington at aramonas@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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