‘Crypto Dad’ Giancarlo Joins Board of Bitcoin Lender BlockFi

Christopher Giancarlo, the former chairman of the U.S. Commodity Futures Trading Commission who’s known as “Crypto Dad” for his early embrace of digital assets, joined the board of cryptocurrency lender BlockFi.

Giancarlo, 61, headed the CFTC when the Chicago Board Options Exchange and CME Group Inc. first offered Bitcoin futures contracts. He gained tens of thousands of followers on Twitter after his February 2018 congressional testimony in which he advocated for a “do no harm” regulatory stance toward blockchain products, the comments that earned him his nickname.

“It’s been fascinating to see how the whole ecosystem around crypto is morphing so fast,” Giancarlo said in an interview. There’s a healthy combination of retail and institutional interest in the market for digital assets such as Bitcoin and Ether, he said. Yet the banks have been slow to embrace the new asset class.

“The opportunity for the BlockFis of the world is the traditional lenders haven’t showed up yet, and yet there’s incredible demand” for dollars and other fiat currency to be used to buy crypto, he said. “The future of money and things of value is digital.”

Giancarlo joins a range of former regulators and Wall Street executives who have jumped to industry roles, including Ben Lawsky, the former head of the New York State Department of Financial Services who’s on the board of Ripple Labs Inc. Gary Cohn, the former president of Goldman Sachs Group Inc., serves on the board of blockchain startup Spring Labs.

Some of the largest non-bank firms in cryptocurrency, including BitGo, BlockFi, Galaxy Digital and Genesis, are stepping up to meet investor demand for dollars amid a longstanding wariness by banks to lend to individuals or companies associated with Bitcoin and other digital assets. They’re lending to hedge funds that need cash to buy Bitcoin for a trade with minimal risk that has been paying out annualized returns that have recently hit 20% to 40%.

BlockFi is a akin to a bank for the virtual-currency realm, paying interest on crypto deposits and making cash loans using those holdings as collateral. It also offers a credit card with Bitcoin rewards, as well as a Bitcoin Trust that gives investors exposure without requiring actual purchases of the digital currency.

Giancarlo recalled his time at the CFTC when Cboe and CME Group self-certified the first U.S. Bitcoin futures contracts.

“It was not without its controversy,” he said, adding that Thomas Peterffy, chairman of Interactive Brokers, placed a full-page ad in the Wall Street Journal decrying the move and saying words to the effect of, “Don’t let Bitcoin futures come about or the western world will end.” Even Wall Street’s futures group, the Futures Industry Association, was against the idea, he said.

While Cboe dropped its Bitcoin contract, CME Group’s has been a success, and the exchange recently added Ether futures.

Giancarlo also serves as senior counsel to law firm Willkie Farr & Gallagher LLP, is on the advisory board of the Chamber of Digital Commerce and acts as an independent director of the American Financial Exchange. He was recently nominated to the board of Nomura Holdings Inc. and is a co-founder of the Digital Dollar Project.

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