U.S. Securities and Exchange Commissioner Calls Out SEC’s Regulatory Approach
U.S. Securities and Exchange Commissioner Hester Peirce took the stage at ETH Denver to express her frustrations with her own agency’s regulatory approach. During a conversation with CNBC’s MacKenzie Sigalos, Peirce criticized the SEC for “regulating by enforcement” and for its slow approval process for spot Bitcoin exchange-traded funds (ETFs).
SEC’s Delay in Approving Bitcoin ETFs
Peirce highlighted the Grayscale case as an example of the SEC’s delay in approving a Bitcoin ETF. She expressed her surprise that it took a court ruling to push the agency to consider approving such a product. Peirce noted that in 2018, the commission had its first Bitcoin ETF application, which she believed should have been approved.
Pending Ethereum Spot ETF Applications
When asked about the status of pending Ethereum spot ETF applications, Peirce mentioned that she couldn’t provide much information but acknowledged the interest surrounding the topic. She stated that these applications are currently under consideration at the SEC.
SEC’s Reliance on Enforcement Actions
A common complaint from the cryptocurrency industry is that the SEC relies too heavily on enforcement actions instead of establishing clear regulatory guidelines. Peirce criticized this approach and argued that it pushes entities away from the U.S., potentially beyond the reach of U.S. regulatory agencies. She emphasized the need for clear rules that allow entities to understand and comply with regulations, rather than relying on enforcement actions after the fact.
The Importance of Collaboration and Safe Harbor
Peirce encouraged collaboration between crypto enthusiasts and policymakers to develop ideas and proposals ready for implementation when SEC Chair Gary Gensler changes his stance on cryptocurrency. She specifically mentioned the concept of a token “safe harbor,” which would provide basic disclosure requirements and allow projects time to achieve decentralization. Peirce highlighted U.S. Representative Patrick McHenry’s Clarity for Digital Tokens Act of 2021 as an example of a safe harbor proposal that aligns with her own ideas.
SEC’s Role in Prosecuting Fraud
While advocating for fair regulations, Peirce also acknowledged the SEC’s role in prosecuting fraud in the crypto space. She emphasized the importance of going after fraudsters who deceive and harm investors. However, she reiterated the need for a balanced approach, where regulation is developed through conversation and collaboration, rather than solely relying on enforcement press releases.
Investor Responsibility
Peirce admonished investors who expect regulators to protect them from bad trades or decisions. She highlighted the importance of personal responsibility and cautioned against blaming the government when things go wrong in the investment space.
๐ฅ Hot Take: SEC Commissioner Urges Clear Regulations and Collaboration ๐ฅ
Hester Peirce, U.S. Securities and Exchange Commissioner, used her platform at ETH Denver to criticize the SEC’s regulatory approach and call for clear guidelines and collaboration in the cryptocurrency industry. Peirce expressed frustration over the delay in approving Bitcoin ETFs and highlighted the need for a common-sense approach that prioritizes clarity and proactive regulation over enforcement actions after the fact. While acknowledging the SEC’s role in prosecuting fraud, Peirce emphasized that regulations should be developed through conversation rather than one-sided enforcement press releases. She also encouraged collaboration between crypto enthusiasts and policymakers to prepare for future regulatory changes.
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