US Securities and Exchange Commission Hester Peirce reiterated her criticism of her agency's approach to cryptocurrencies in a recent appearance at ETH Denver.
Pierce expressed frustration with the SEC's tendency to “regulate by enforcement” and criticized the slow approval process for Bitcoin exchange-traded funds (ETFs).
during A conversation with CNBC's Mackenzie SigalosPierce highlighted the SEC's handling of the grayscale issue, which led to the approval of a Bitcoin exchange-traded product.
“It's remarkable to me that it took the court to tell us we had to do this,” Pierce said.
“I started in 2018. That summer, we were offered the first exchange-traded product with Bitcoin as a commission. And I thought at the time, which was a long time ago, that we should have said yes to that.
Pierce declined to comment on pending applications for Ethereum ETFs, noting that they are currently under consideration at the Securities and Exchange Commission.
SEC Continues Regulation Through Enforcement Against Cryptocurrencies: Hester Peirce
One of the major drawbacks in the cryptocurrency industry is the SEC's reliance on enforcement procedures rather than establishing clear regulatory guidelines upfront.
Pierce criticized the agency for its reactive approach and stressed the importance of having clear rules that can be followed, rather than relying on enforcement procedures after the fact.
“If you really want to differentiate between bad behavior and good behavior, having clear rules for people who want to follow them is a much better approach than doing so and then parachuting in with enforcement.”
Pierce called for cooperation between cryptocurrency enthusiasts and policymakers to develop ideas that can be implemented when SEC Chairman Gary Gensler changes his stance on cryptocurrencies.
She mentioned the distinct “safe harbour” concept that would provide basic disclosure requirements and allow projects time to decentralize.
This is in line with its previous proposal and a bill introduced by US Representative Patrick McHenry in October 2021, which proposes a three-year safe harbor period for emerging cryptocurrency companies to demonstrate network maturity and decentralization.
Pierce acknowledges the SEC's role in prosecuting fraud
During the conversation, Pierce also acknowledged the SEC's role in prosecuting fraud.
As reported, the Securities and Exchange Commission revealed that Executive actions for fiscal year 2023 This resulted in nearly $5 billion in fines and compensation for investors.
According to the SEC, the total penalties received between October 2022 and September 2023 was the second highest amount on record.
However, Pearce stressed the need to have a balanced conversation about regulation, rather than relying solely on enforcement measures.
Meanwhile, SEC Chairman Gary Gensler has been an outspoken critic of cryptocurrencies recently, warning of the cryptocurrency industry's lack of compliance.
Back in September, it is Admit that while not all tokens can be pre-judgedMuch of the cryptocurrency industry is subject to securities laws but remains non-compliant.
“This cryptocurrency space, most of it, without prejudging any token, a large portion of it is subject to securities laws, but unfortunately, a lot of it is also non-compliant,” he said.
