Photo: Greg Kahn. Shutterstock image by DCStockPhotography
- The pro-crypto SEC Commissioner Hester Pierce issued a public statement Wednesday slamming the agency’s new regulatory agenda.
- Commissioner Pierce dubbed the SEC’s regulatory approach as “flawed” and dangerous for the country’s capital markets.
- She also criticized the SEC’s attempt to regulate decentralized finance without first addressing the crypto industry’s primary needs.
Hester Pierce has issued a public statement criticizing the U.S. Securities and Exchange Commission’s new regulatory agenda. She described the agency’s approach as “flawed” and dangerous for the country’s capital markets.
Commissioner Pierce Blasts SEC’s Agenda
Commissioner Hester Pierce has spoken out against the SEC’s new crypto regulatory agenda.
The fervently pro-crypto member of the SEC’s five-person board of commissioners issued a public statement Wednesday bashing the regulatory agency’s new “Regulatory Flexibility Agenda.” Published the same day, the agenda includes 53 legislative documents that outline the short and long-term regulatory actions that the administrative agency plans to take.
According to the SEC’s Chairman Gary Gensler, the agenda is driven by two public policy goals: continuing to drive efficiency in U.S.’s capital markets and modernizing the rules for today’s economy and technologies. “Doing so will help us to achieve our three-part mission: protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation,” Gensler said in announcing the agenda in a press release.
Commissioner Pierce, however, disagrees with Chair Gensler’s approach to regulating capital markets, noting in her latest statement that his plan “sets forth flawed goals and a flawed method for achieving them.” She wrote:
“The agenda, if enacted, risks setting off the regulatory version of a rip current—fast-moving currents flowing away from shore that can be fatal to swimmers. Just as certain wave and wind conditions can create dangerous rip currents, the pace and character of the rulemakings on this agenda make for dangerous conditions in our capital markets.”
Commissioner Pierce then proceeded to blast the SEC’s plan, saying that it shunned issues at the core of the agency’s mission in favor of “shiny objects” outside its jurisdiction. “We once sought to protect retail investors; we now rush to the aid of professional investors,” she said, adding that she believes the SEC in its current form does less to help small and emerging companies and instead increases their costs and shrink their investor base.
Amongst her criticism, Commissioner Pierce also addressed the agency’s sneaky attempt to regulate crypto protocols—specifically decentralized cryptocurrency exchanges and liquidity providers—without first dealing with the industry’s primary needs and repeated demands for regulatory clarity.
“Although the Agenda includes rules that might regulate crypto protocols or platforms through an unmarked backdoor, it does not appear to include any rules primarily intended to grapple with the main regulatory questions that have arisen around these assets,” she wrote, referring to the SEC’s proposed rule to amend the definition of “exchange” in the Securities Exchange Act of 1934.
The said rule, outlined in a 591-page document published in January, fails to make any direct references to crypto assets or decentralized finance protocols. Instead, it proposed including all “communication protocols” and systems that facilitate buyers and sellers of securities within the Exchange Act’s definition of an “exchange.”
Many industry experts have argued that the proposed rule represents an effort on the SEC’s part to bring decentralized exchanges and money market protocols under its regulatory purview. More importantly, the definition’s excessively broad phrasing risks redefining all “communications protocols” as potential securities exchanges. As a result, many notable crypto industry stakeholders, including Coinbase, Delphi Digital, Coin Center, FTX, and the Blockchain Association, have submitted comments to the agency opposing the proposal.
Commissioner Pierce, responsible for SEC’s Token Safe Harbor proposal, stated that when the agency hurriedly writes and implements a myriad of rules it creates conditions that could roil the markets. “We can avoid creating regulatory rip currents by recalibrating our agenda to focus on issues core to the protection of investors and operation of our markets and by slowing down the pace to ensure that we and the public can think about what we are doing,” she summarized.
Disclosure: At the time of writing, the author of this piece owned ETH and several other cryptocurrencies.
The information on or accessed through this website is obtained from independent sources we believe to be accurate and reliable, but Decentral Media, Inc. makes no representation or warranty as to the timeliness, completeness, or accuracy of any information on or accessed through this website. Decentral Media, Inc. is not an investment advisor. We do not give personalized investment advice or other financial advice. The information on this website is subject to change without notice. Some or all of the information on this website may become outdated, or it may be or become incomplete or inaccurate. We may, but are not obligated to, update any outdated, incomplete, or inaccurate information.
You should never make an investment decision on an ICO, IEO, or other investment based on the information on this website, and you should never interpret or otherwise rely on any of the information on this website as investment advice. We strongly recommend that you consult a licensed investment advisor or other qualified financial professional if you are seeking investment advice on an ICO, IEO, or other investment. We do not accept compensation in any form for analyzing or reporting on any ICO, IEO, cryptocurrency, currency, tokenized sales, securities, or commodities.
See full terms and conditions.
SEC Commissioner Hester Peirce Opposes Crypto Bailouts
SEC Commissioner Hester Peirce has suggested in an interview with Forbes that she would oppose bailouts for crypto projects, though she remains friendly toward the space. Peirce Condemns Crypto Bailouts…
After Bitcoin, SEC Commissioner Hester Peirce Backs DeFi
Hester Peirce, a commissioner at the U.S. Securities and Exchange Commission (SEC), recognized that DeFi is “a rapidly growing corner of the crypto world with significant money.” She added that…
Pro-Bitcoin SEC Commissioner Hester Peirce Elected to Serve Five More …
Commissioner Hester Peirce has been re-elected to the Securities and Exchange Commission (SEC), allowing her to serve with the regulatory body for another term. Peirce has a good reputation within…
SEC Chair Gensler Reiterates DeFi Regulatory Risks
In a Wednesday Financial Times interview, SEC Chairman Gary Gensler repeated his request for crypto trading platforms to register with the SEC, claiming they risk regulatory trouble by operating outside…