SEC Commissioner Hester Peirce has said that the regulatory agency is currently operating in an “enforcement-only mode” when it comes to the regulation of cryptocurrencies.
Peirce, known for her crypto-friendly stance among the SEC’s five commissioners, expressed her concerns during her speech at ETHDenver, an annual gathering of crypto developers, investors, and marketers with a focus on Ethereum, the second-largest blockchain after Bitcoin.
Addressing the packed main stage, Peirce acknowledged the burden placed on industry participants who constantly worry about avoiding legal disputes.
“If we had clearer rules, you could focus on building,” she said.
Peirce Says Excessive Regulation Would Hinder Innovation
While stressing that her views were her own, Peirce openly voiced her frustration with the SEC’s tendency to pass judgment on cryptocurrencies as an asset class.
She remarked that excessive regulation would hinder innovation and urged for a more understanding and collaborative approach.
“I really think that we can get to a better place in the United States, it is taking a lot longer than probably you all want, but I do think we can get there if we work together and think about what would make sense.”
Since joining the SEC in 2018, Peirce, a lawyer by profession, has been a vocal advocate for the crypto industry, even in the face of skepticism from some of her colleagues, including SEC Chair Gary Gensler.
“If we all want to bubble wrap ourselves, it would be a much less interesting country,” she said, defending the importance of avoiding excessive regulatory restrictions.
SEC Wages War Against Crypto Players
The SEC has been involved in legal battles with various crypto companies, including Coinbase, Ripple, and Kraken, alleging that they offered illegal and unregulated investments to the US public.
These lawsuits are based on the belief that cryptocurrencies should adhere to the same regulatory rules as traditional investments like stocks.
However, both the accused companies and Commissioner Peirce argue that crypto requires clearer guidelines and more regulatory clarity from both the SEC and lawmakers.
Notably, the SEC faced a recent setback in its fight against Grayscale, the issuer of the GBTC (Grayscale Bitcoin Trust), regarding its attempt to convert the bitcoin trust into an exchange-traded fund (ETF).
The SEC’s loss in court forced the agency to subsequently approve several Bitcoin ETFs in January.
“It’s remarkable to me that it took a court to do that,” Peirce said, expressing her surprise that it took a court ruling to prompt such a development.
Despite the SEC’s current enforcement-oriented strategy, Peirce emphasized the importance of continuing to develop regulatory frameworks for cryptocurrencies.
She mentioned the token safe harbor act and her own proposed safe harbor proposal as potential avenues for providing clarity to the industry.
As reported, billionaire investor Mike Novogratz believes many of the lawsuits brought under current SEC Chair Gary Gensler will be dropped.
The crypto veteran said that regardless of the political affiliation of the next SEC chairperson, there is a likelihood that many of the lawsuits initiated under Gary Gensler’s tenure will be dropped.
“Looking ahead, regardless of the political affiliation of the next SEC chairperson, there’s a likelihood that many of the lawsuits initiated under Gensler’s tenure will be dropped,” he said.
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