SEC Commissioner Explains Why the Regulator Has Not Created Crypto Rules.
According to Peirce, the regulator’s current approach will take 400 years to go through all the cryptocurrencies it alleges are securities.
US Securities and Exchange Commission (SEC) Commissioner Hester Peirce has given her opinion on why the regulator has so far failed to develop clear rules for the crypto space.
Peirce, fondly called “Crypto Mom,” made this known while giving a speech at the Duke Conference on January 20.
Peirce compared the SEC’s current regulatory approach to an unromantic version of CompuDate from the 1960s comedy series That Girl. According to her, the SEC invited industry participants only to slap them with lawsuits, asserting that the current approach of regulation by enforcement will take 400 years.
“The SEC’s approach to regulating crypto looks somewhat like a decidedly unromantic version of CompuDate from the old TV show: we tell people to come down to the office to talk to us about their projects, plug the information they give us into our proprietary security-identifying algorithms, and then send the people home with a court date,” Peirce said. “… if we continued with our regulation-by-enforcement approach at our current pace, we would approach 400 years before we got through the tokens that are allegedly securities.“
However, Pierce says the SEC does not want to create clear rules for the industry as it would have to admit that it is not within its authority to regulate some cryptocurrencies, and Congress may decide to give the power to another regulatory body instead of extending its authority.
“Why no rule? If they are all securities, then voila—problem solved! But if we seriously grappled with the legal analysis and our statutory authority, as we would have to do in a rulemaking, we would have to admit that we likely need more, or at least more clearly delineated, statutory authority to regulate certain crypto tokens and to require crypto trading platforms to register with us. And Congress might decide to give that authority to someone else.“
Alternatively, the regulator has suggested that industry participants would have to fix some of the issues that came to the fore in 2022 instead of waiting for regulators. According to her, the technology builders are responsible for its true value proposition.
Despite being one of the 5 SEC commissioners, Peirce has maintained a pro-crypto stance, often criticizing the SEC’s enforcement actions. Citing a close SEC source, FOX Business journalist Eleanor Terrett last year reported that the commissioner had expressed that the SEC would lose its case against Ripple.