U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce is stressing the need for regulatory clarity and innovation, making it clear that such elements cultivate a conducive environment for the development of crypto.
Peirceโs roadmap
In a recent discussion with CNBC, Pierce criticized the U.S.โs inadequate regulation of Bitcoin (BTC) and other cryptocurrencies, pointing out that this failure has allowed fraud to thrive while stifling innovation. See video below.
Peirce also stressed the significance of allowing innovation and responsible experimentation to flourish in the crypto industry, believing that a conducive regulatory environment is essential for healthy development and long-term success.
Furthermore, she calls for more clarity from Congress regarding the SECโs role in regulating digital assets, suggesting that clear guidance from lawmakers would help define the boundaries between traditional securities and digital commodities, as this facilitates a more structured regulatory framework.
Whatโs more, she mentioned efforts by pro-crypto Senators such as Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY), to introduce a comprehensive regulatory framework for the crypto industry, aiming to strike a balance between regulation that fosters innovation and much-needed clarity for market participants.
Peirce also notes the evolving nature of the SECโs role in regulating cryptocurrencies, highlighting the agencyโs need to adapt to changes in the industry and work towards a more robust regulatory framework that addresses emerging challenges.
Her insights underscore the importance of effective regulation in shaping the future of cryptocurrencies, balancing investor protection with fostering innovation in this rapidly evolving sector.
Peirce calls out SEC
Last year, Peirce voiced her disagreement with an SEC proposal regarding crypto custody.
This proposal seeks to broaden the scope of custody requirements to cover crypto assets, potentially reducing the number of qualified crypto custodians. Peirce believes the proposal is overly restrictive and could hinder investor access to crypto.ย
She criticized the SECโs regulatory approach, accusing them of attempting to assert control over crypto without proper jurisdiction.
The proposal has garnered mixed responses, with some commissioners backing it while others, including Peirce, oppose it. A 60-day public comment period has been established to allow stakeholders to share their views and suggestions.
At the Duke Conference on Jan. 20, 2023, Peirce addressed the fallout of the 2022 bear market, which saw the demise of several leading crypto firms and significant layoffs across the sector. Peirce emphasized the nascent stage of blockchain technology, arguing that innovative technologies need time to develop and mature.
Last October, Peirce also voiced concerns about the SECโs enforcement action against LBRY, a blockchain firm.
Peirce disagreed with the SECโs case, pointing out a lack of evidence of fraud and noting LBRYโs cautious approach to digital assets compared to other crypto projects. She criticized the SECโs aggressive stance, especially the hefty $44 million penalty sought, suggesting that these resources could have been better used to create a regulatory framework for companies like LBRY.
This, she argued, would have allowed market forces to determine LBRYโs fate. SECโs enforcement action ultimately forced LBRY to shut down, prompting Peirce to question whether the Commissionโs focus on enforcement discourages innovation in blockchain technology.
Highlighting the uncertainty surrounding the future of crypto, Peirce remarked that even esteemed figures in the field cannot accurately predict its trajectory. She stressed the pivotal role of industry builders in driving its advancement, contrasting them with regulators like herself, who lack technical acumen and observe from the sidelines.
