Hester Peirce, a Commissioner of the US Securities and Exchange Commission (SEC) criticized her own agency’s approach towards crypto.
She expressed her frustration over the use of an enforcement approach towards the crypto industry and lambasted the SEC for dragging its heels in approving spot Bitcoin ETFs.
The commissioner
Peirce said that the Grayscale case had given the regulator the opportunity to approve a Bitcoin-exchange traded product, but it was remarkable that a court had to tell it to do so.
She revealed that she had started working at the agency in 2018 and it was the first time that the first Bitcoin-exchange traded product had been brought to their notice.
She said that she had thought at the time that they should have approved it. She acknowledged that now people were wondering about the Ethereum spot ETFs.
She stated that she would use the lawyer’s answer to respond to this speculation, which means that the SEC is considering it.
The SEC has received a lot of criticism about its use of enforcement action where the crypto industry is concerned in lieu of regulation.
The agency has filed lawsuits against various crypto companies in line with this approach, which include Coinbase, Ripple, and Lbry.
The lack of regulation
Peirce is known for speaking regularly at events and is also known for her criticisms of her agency. She blasted the regulator for acting after the fact instead of setting up clear regulatory guidelines.
She asserted that some of the choices of the SEC were downright strange from the viewpoint of people who consider regulation to be the solution.
She said that pushing entities outside of the US meant that they would no longer be in control or oversight of the regulatory agencies in the country.
She suggested that it would be better to take a common sense approach. She said that having clear rules in place was better to sort between good and bad behavior.
She added that it was much better than parachuting in later with an enforcement approach, which the SEC seems to be doing.
The suggestions
Peirce also said that policymakers and crypto enthusiasts should have ideas at the ready when the chairman of the SEC, Gary Gensler, changes his views.
She explained that it was best to have some basic disclosure in the market and then give projects time to reach that particular decentralization point.
The Clarity for Digital Tokens Act of 2021 was introduced by US Representative Patrick McHenry back in October 2021.
It was aimed at creating a safe harbor that aligned with the proposal suggested by Peirce and would give three years for crypto startups to become decentralized.
This would ensure that their tokens would no longer meet the definition of securities outlined in the federal laws.
Since Bitcoin is decentralized, the SEC considers it a legitimate crypto token, but it has been unclear about the rest.
While Peirce states that the SEC should introduce fair regulations in the crypto space, she also believes that the agency plays an important role in dealing with fraud in the market.