Hester Peirce, a member of the US Securities and Exchange Commission (SEC), harshly criticized the agency's stance on cryptocurrency oversight. Peirce, affectionately known as “Crypto Mom” for her pro-crypto stance, expressed her concerns during a recent speech at ETHDenver and clarified the agency's approach to regulating the rapidly evolving industry.
Over the past year, the SEC's enforcement team has been particularly active, pursuing major cases against prominent names and companies in the cryptocurrency space. Notable targets include crypto exchanges Coinbase and Kraken, as well as NFT creator Stoner Cats. These actions were taken against entities that allegedly failed to register with the SEC.
Peirce emphasized the need for clarity in regulatory rules. He argued that the SEC should focus on bad actors committing fraud rather than punishing those who seek clear rules to operate in the crypto ecosystem. However, he questioned the wisdom of pursuing registry breaches simply because an individual interacts with a crypto asset. According to Peirce, there is no claim of harm in such cases.
While acknowledging the importance of registration obligations, Peirce criticized the SEC's retroactive approach. Waiting years to label a crypto asset as a security seems counterproductive, according to Peirce. Peirce debated whether it was right to penalize individuals for not registering when the definition of a security was not yet clear.
SEC Chairman Gary Gensler, who oversees Peirce and three other commissioners, took a different view. Gensler argues that many cryptocurrencies qualify as securities and urges crypto platforms to register and comply with existing securities laws. The crypto industry, on the other hand, is struggling for clarity regarding regulatory requirements. Coinbase's 2022 rulemaking petition targeting specific industry rules was met with resistance by the SEC, which argued that existing rules were sufficient.
However, Peirce did not give a clear answer to the question of whether the Ethereum Spot ETFs would be approved and said that they were “under review by the SEC.”
*This is not investment advice.
