SEC Commissioner Hester Peirce criticized the regulator’s ‘counterproductive’ approach to cryptocurrency oversight.
Securities and Exchange Commission (SEC) Hester Peirce has criticized the regulator’s approach to cryptocurrency oversight, calling some of its positions “counterproductive” and “pointless.”
Peirce, a Republican member of the SEC nicknamed “Crypto Mom” for her supportive stance on cryptocurrencies, spoke on ETHDenver Thursday afternoon about the agency’s approach to regulating the industry.
The SEC’s enforcement team has been active over the past year, specifically targeting cryptocurrency exchanges Coinbase and Kraken, which have not registered with the regulator, as well as NFT creator Stoner Cats. A lawsuit was filed.
“I don’t follow those who call for clear rules about how to proceed in this space,” Peirce said Thursday. Peirce added that it makes sense to pursue bad actors involved in fraud.
“But when you talk about registration violations, because someone touched a cryptocurrency asset, we come back years later and say, oh, that’s a security.” Peirce continued: “It seems pointless because you’re filing a lawsuit against someone who doesn’t allege they were injured.”
She added that she does not minimize the importance of the registration obligation.
“But if you don’t want to tell people what their securities are, then it seems very counterproductive to check the facts and single out people who haven’t registered,” Peirce said.
SEC Chairman Gary Gensler, who oversees Peirce and three other commissioners, has taken the position that many cryptocurrencies are securities and urged cryptocurrency platforms to register with regulators and comply with securities laws. Meanwhile, the cryptocurrency industry said it needed clarity on how the rules would be enforced. Coinbase filed a rulemaking petition in 2022 to get new rules specific to the industry, but the SEC brushed Turn it off and say existing rules apply.
Lawmakers in Washington have also been working on legislation for years to regulate the industry, but it has yet to get before President Joe Biden for his signature.
safe harbor
Peirce was also asked Thursday about the safe harbor proposal that debuted in 2020.
Safe Harbor Proposal “We seek to provide network developers with a three-year grace period to facilitate their participation in and development of functional or decentralized networks that, under certain conditions, are exempt from the registration provisions of the federal securities laws.” Peirce said In 2021.
The updated version requires the project to perform semi-annual updates and an analysis explaining why the network is decentralized or functioning the way it does. Peirce told ETHDenver on Thursday that the industry needs to research their ideas and “get ready to implement them.”
“I always say Chairman Gensler is going to wake up tomorrow morning and have an epiphany and be in a different place,” Peirce said, “so we have to have ideas ready that we can use when that happens.”
The unspoken implication: Gensler’s term as chairman ends on June 5, 2026, but a newly elected president, especially Republicans, may ultimately seek to appoint a new SEC chairman who is more friendly to the cryptocurrency industry.
Meet the Ethereum ETF on-site
Peirce was asked Thursday about where the SEC would potentially approve a spot Ethereum Exchange-Traded Fund.
“I will again use the attorney’s response to say that the SEC is considering it,” Peirce said.
famous companies such as fidelity and black stoneThere have been applications for a spot Ethereum ETF over the past few months, with some analysts predicting the SEC could approve the product as soon as possible. In May Of the year. other people said It may still take a year or two.
SEC Chairman Gensler suggested I said last month that regulators’ decision to approve a spot Bitcoin ETF earlier this year shouldn’t necessarily signal how they will respond to Ethereum in the future.
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