The co-founder of the Digital Economy Initiative talks to Liz Lumley about the importance of self-study, why crypto is not bad and the lessons to be learned from 'hidden figures'.
While working at JPMorgan within a range of activities, including the London interbank offered rate and investment banking, Ijeoma Okoli learned about three African–American mathematicians — Katherine Goble Johnson, Dorothy Vaughan and Mary Jackson — and their previously unknown contribution to the US space programme in the 1950s and 1960s.
Her desire to champion Black female pioneers in Britain so that their stories will not be lost to history and they will continue to inspire current and future generations, resulted in an exhibition, Stories of Black Leadership, which is now part of the UK’s Black Cultural Archives — a collection of black history in the country. She lists this as one of her “proudest moments”, as well as the diversity of her career.
The tendency to dedicate time to ‘self-study’ led Ms Okoli, a financial services lawyer in the traditional finance space, to the non-traditional world of cryptocurrencies and decentralised finance, or DeFi. That self-study was promoted by the rise of initial coin offerings (ICOs) in 2017.
Career history: Ijeoma Okoli
2022 The Digital Economy Initiative, co-founder, director
2019 Impact X Capital Partners, founding member and limited partner
2017 Women in Law Empowerment Forum, global advisory board
2015 JPMorgan, executive director
Having spent much of her career as a securities lawyer with extensive experience in structuring deals, Ms Okoli became “intrigued” by ICOs, which seemed to her to be securities. The ICOs being offered to the public did not seem to qualify with any of the exemptions to registration that exist in the US framework, and were not being registered with the US Securities and Exchange Commission (SEC).
In order to understand this, Ms Okoli went about learning the language of crypto.
“I had to educate myself on the lingo, the technology, the products, and actually do that legal analysis,” she adds. “I do this with things that interest me. I just go off and think about them and try to figure them out — this is one thing that set me on that journey.”
While Ms Okoli did eventually conclude that the ICOs she was seeing were securities offerings, she was still puzzled as to why the SEC was allowing them to flourish and why “participants were either intentionally or unintentionally not complying with US securities laws”.
As a securities lawyer, she knew (and accurately anticipated) that the SEC would start to crack down on the rise of ICOs; in July 2017, the SEC published what is known as the ‘DAO Report’. The report found that tokens or coins offered and sold by a ‘virtual’ organisation known as ‘The DAO’ (decentralised autonomous organisation) were securities and therefore subject to the federal securities laws. It confirms that issuers of distributed ledger or blockchain technology-based securities must register offers and sales of such securities unless a valid exemption applies. Those participating in unregistered offerings also may be liable for violations of the securities laws.
In 2021, Ms Okoli was asked to design the risk management and governance framework for cryptocurrencies for JPM.
After leaving the bank in 2022, Ms Okoli founded the Digital Economy Initiative along with Toby Norfolk-Thompson, who serves as a director and chair of the advisory council and is the chief investment officer of Matrixport, a global digital asset manager.
The Digital Economy Initiative is an independent think tank focused on crypto asset policy in the US and UK. It is founded on the understanding that there is a lack of comprehensive legal and regulatory frameworks in both jurisdictions. The initiative finds ways to encourage common sense regulatory frameworks that will take into consideration investor and consumer protection, as well as market integrity and financial stability. It is also dedicated to “encouraging and not stifling innovation”, adds Ms Okoli.
I wanted to make sure that just because it’s crypto doesn’t mean it’s bad
“I wanted to make sure that just because it’s crypto doesn’t mean it’s bad,” she says.
Her experience underpins the work of the Digital Economy Initiative, having worked as a financial regulatory lawyer within several banking groups including asset management, corporate treasury, investment banking and with financial stability issues in the aftermath of the financial crisis.
“All of that led to the time we currently exist in now, and can help folks understand the products and understand how things from the traditional financial sector would help in terms of minimising the risks,” she adds.
After all, the crypto sector is only around 15 years old (starting with the publishing of the Satoshi Nakamoto white paper laying out the creation of bitcoin in 2008), remarks Ms Okoli.
“We must think about everything because it’s a brand-new sector,” she adds.
One element that is yet to exist is the proposed development of central bank digital currencies (CBDCs). Their development is controversial.
“CBDCs are issued by governments,” she says. “To the extent they are actually issued, they would enjoy the full faith and credit of the relevant governments, but you have some folks who are concerned about the government’s ability to see their activities in intimate detail in ways we currently don’t envisage.”
In the US, the constitution protects citizens from government abuses, says Ms Okoli, but privacy and security concerns are valid. “These are things that must be considered and worked through, before any decision to issue CBDCs are made,” she adds.
