SEC’s Hester Peirce calls for clear crypto regulation
The United States Securities and Exchange Commission (SEC) Commissioner Hester Peirce, known for her support of the cryptocurrency industry, has called for clear and sensible regulatory frameworks to foster innovation and provide clarity for crypto developers. Speaking at the ETHDenver conference, Peirce, also referred to as ‘Crypto Mom,’ highlighted the challenges faced by the industry due to regulatory ambiguity, which she believes is driving crypto firms and trading activity offshore. Her comments come amidst criticism from industry leaders like Coinbase CEO Brian Armstrong and a push from the House Financial Services Committee to curtail the SEC’s oversight of the crypto industry.
Peirce’s advocacy for a clear regulatory path is underscored by the need for the market to naturally determine the crypto industry’s operations, rather than lawmakers. She emphasized the detrimental effects of the SEC’s current “enforcement-only mode” on U.S. crypto firms and investors, suggesting that most in the industry are seeking to understand the rules to ensure they operate within legal boundaries. The SEC’s approach has been challenged by a Government Accountability Office report and a lawsuit from eleven U.S. state attorneys general, both raising concerns about the SEC’s authority and the enactment of Staff Accounting Bill 121 without proper consultation.
The call for sensible regulation is not only about fostering innovation but also about protecting the integrity of the U.S. financial system. Peirce pointed out the benefits of decentralization, contrasting it with the risks of centralization, and raised concerns about treating decentralized technologies as financial institutions. She stressed the importance of balancing enforcement with the growth of projects, advocating for clear rules to guide the industry’s development while ensuring compliance with securities laws and providing disclosure to investors. With the SEC recently adopting rules to increase oversight of market participants and bring decentralized finance (DeFi) projects under its purview, Peirce’s remarks underscore the urgency for a regulatory environment that supports innovation and market integrity.