Crypto firm Flowdesk hires former NYSE counsel as it looks to build US presence

A little-known digital asset trading company is trying to navigate the vast and murky waters of cryptocurrency regulation in the U.S. and is appointing a seasoned legal professional as its new chief compliance officer, FOX Business has learned.

Flowdesk, the four-year-old French venture firm that provides liquidity to some of Wall Street’s crypto ETFs, has added veteran securities lawyer James Morgan to its board of directors in a bid to position the firm as a major institutional player in the U.S. crypto market.

“The U.S. is a strategically important market,” Flowdesk CEO Guilhem Chaumont told FOX Business. “Developing a robust regulatory approach is a key piece of the puzzle. By adding someone of James’ caliber, with nearly 10 years of regulatory crypto experience, Flowdesk will be well-prepared to succeed and grow its business in the U.S.”

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Flowdesk has largely flown under the radar since opening its U.S. office a year ago. But it briefly made headlines in January for a successful Series B funding round that included backers like crypto payments company Ripple. That same month, Flowdesk quietly agreed to act as a liquidity provider for crypto asset manager Grayscale when it launched one of 11 spot bitcoin ETFs alongside Wall Street giants BlackRock and Fidelity. It’s doing the same for Grayscale’s ethereum ETF, which began trading on Tuesday.

Morgan’s appointment, which spans a 20-year career in law, working in both crypto and traditional finance, comes at a time when the U.S. cryptocurrency industry could be on the brink of a new regulatory frontier with the upcoming presidential election.

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It also follows a trend of crypto companies adding “TradFi” (traditional finance) veterans to their executive ranks, as the nascent sector seeks mainstream adoption and legitimacy. In September, Flowdesk appointed TradFi-to-crypto veteran Reed Werbitt as its US CEO.

Lawyers like Morgan, who bring particular expertise in both digital and traditional securities law, are in high demand as U.S. regulators such as the Securities and Exchange Commission seek to bring crypto under their jurisdiction.

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“I’m excited to join the Flowdesk team at such a pivotal time for crypto,” Morgan told FOX Business in an exclusive interview. “How this new administration approaches regulation will set the tone for the years to come.”

For the past three years, President Biden’s SEC chairman, Gary Gensler, has imposed a sweeping regulatory crackdown on the $2 trillion crypto industry, bringing enforcement actions against some of its biggest players. Gensler said the crypto industry is rife with bad actors who violate securities laws by coming to the commission and refusing to register. The crypto industry says it’s not that simple, and the current registration process doesn’t align with the nuances of blockchain technology, creating a regulatory impasse.

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SEC Chairman Gary Gensler attends the Financial Stability Oversight Council meeting at the U.S. Treasury Department on July 28, 2023 in Washington, D.C.

Meanwhile, Republican presidential candidate Donald Trump is trying to woo the crypto industry ahead of the November election with promises to loosen regulations and end what he calls “Biden’s war on crypto.”

Morgan is no stranger to dealing with financial regulators from both political parties. He has 10 years of experience in compliance roles at the New York Stock Exchange, the world’s largest stock exchange, and the Miami Stock Exchange (actually in New Jersey), where he regularly dealt with the SEC, the Commodity Futures Trading Commission and the Financial Industry Regulatory Authority.

His recent roles as general counsel at digital asset trading firms FalconX and Genesis Global Trading gave him a front-row seat to regulators’ evolving positions on digital assets.

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“The regulatory landscape in the U.S. has evolved steadily over the years,” Morgan said. “Sometimes this evolution has been slow, but I think there is a strong potential that the pace of regulatory change will accelerate rapidly in the near future, and Flowdesk is prepared for that possibility.”

It’s no secret that crypto regulation has become a political football this year. Republican lawmakers, who are typically more open to digital assets than their Democratic counterparts, are pushing for legislation that would help give crypto the regulatory clarity it seeks.

Democrats have realized that Trump and his running mate JD Vance appeal to a large segment of the pro-crypto crowd, many of whom identify as single-issue voters, meaning they will vote for the candidate who is most pro-crypto regardless of other political views.

Republican presidential candidate, former President Donald Trump, greets Republican vice presidential candidate, Senator J.D. Vance, during the second day of the Republican National Convention at the Fiserv Forum in Milwaukee, Wisconsin, on July 16, 2024.

The political impact on the crypto industry is more uncertain than ever after Biden announced on Sunday that he would not seek re-election. Vice President Kamala Harris, the likely Democratic nominee, has not stated a clear position on crypto, and it is unknown whether Gensler would remain as SEC chair if elected.

Vice President Kamala Harris holds a campaign event in Fayetteville, North Carolina, on July 18, 2024.

Trump’s victory and Republicans’ victory in Congress could mark the start of a new era of growth for crypto innovation in the country, which could benefit Flowdesk and other companies looking to expand in the U.S.

Original article source: Crypto firm Flowdesk hires former NYSE advisor to boost US presence