U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce, popularly known as “Crypto Mom,” expressed her view that cryptocurrency laws in the United States should take a more cautious and reserved approach In a recent discussion at Australian Blockchain Week. She argued against regulating all aspects of the technology solely from a financial perspective, emphasizing that cryptocurrencies have various use cases beyond finance, such as facilitating decentralized interactions.
Peirce stressed the importance of creating a regulatory framework that allows for experimentation and innovation, rather than imposing rigid rules that may stifle the development of new applications for crypto and blockchain technology. She advocated for a balance between providing sufficient clarity within the legal framework and avoiding excessive rigidity that fails to accommodate emerging use cases.
Taking a veiled swipe at the SEC’s current regulatory approach, which has faced criticism from many, including Peirce herself, the commissioner warned against a situation where regulators remain reserved for an extended period and then suddenly initiate a series of enforcement actions years later. She emphasized the need for proactive and adaptive regulation that keeps pace with industry advancements.
SEC approach to crypto
Peirce further expressed her belief that the SEC can improve its approach to cryptocurrencies and blockchain technology. She highlighted the opportunity for the SEC to reevaluate its perspective on innovation and acknowledged that the current regulatory stance may not be suitable. Peirce advocated for a more open and progressive approach that fosters innovation while addressing potential risks and concerns.
Referencing the recent collapse of FTX and subsequent allegations of misconduct, Peirce urged the crypto industry to take responsibility for self-regulation. She emphasized the importance of addressing counterparty risks, conflicts of interest, and leverage. While Peirce suggested that the industry should be proactive in managing these issues, she also acknowledged the potential role of government regulators in providing guidance and support.
“Those are things you don’t need a government regulator to tell you to do, but I think government regulators can play a role in that.”
Additionally, Hester Peirce emphasized the need for a balanced and reserved regulatory approach to cryptocurrency in the United States. She called for a regulatory framework that accommodates various use cases beyond finance, encourages innovation, and offers clarity while avoiding excessive rigidity. Peirce also expressed her belief that the SEC can improve its approach to crypto and highlighted the industry’s responsibility for self-regulation while recognizing the role of government regulators in certain areas.