A US Securities and Exchange Commission (SEC) commissioner has called for “a coherent and consistent legal framework that works across all asset classes,” including crypto assets. He warned that the current SEC enforcement-focused approach would take 400 years to go through all the crypto tokens that are supposed to be securities.
SEC Commissioner on Crypto Regulation
A US Securities and Exchange Commission (SEC) commissioner, Hester Peirce, spoke about crypto regulation in her speech at the “Digital Assets at Duke” conference on Jan. 20.
Noting that the securities regulator has “pursued registration violations in a seemingly random manner, often years after the original offering,” the commissioner emphasized:
We must develop a coherent and consistent legal framework that works across all asset classes. Our vague enforcement of the law has created arbitrary and destructive outcomes for cryptocurrency projects and buyers.
“When we insist on enforcing securities laws in this way, secondary token purchasers are often left with a pool of tokens that they cannot trade or use because the SEC requires special handling under securities laws,” he warned. Peirce. “Many of these requirements apply under a strict liability standard, so clarity is essential.”
The commissioner continued: “Why not establish a coherent legal framework in one rule?” crafting:
After all, if we were to continue with our regulation-by-app approach at the current rate, we would be approaching 400 years before we would go through tokens that are supposed to be securities.
“By contrast, an SEC rule would have universal, though not retroactive, coverage as soon as it takes effect,” he noted.
Commissioner Peirce further explained: “A rational framework should make it easier for bona fide crypto actors to comply with our securities laws, which would free up the SEC to focus more resources on bad faith actors.”
However, he warned:
Crypto regulation is not easy to get right. If crypto institutions are treated like regular depository institutions, requiring large layers of capital and lots of legal staff, crypto innovation is likely to slow down.
This was not the first time that Commissioner Peirce raised concerns about the way the SEC has been regulating the cryptocurrency sector. She has repeatedly criticized the securities regulator for taking a application-centric approach to regulate the crypto space. He also believes that the regulator should already have approved a spot bitcoin exchange traded fund (ETF). In May of last year, he warned that the SEC has dropped the ball on oversight of cryptocurrencies, stating: “We are not allowing innovation to unfold and experimentation to happen in a healthy way, and there are long-term consequences of that failure.”
Commissioner Peirce isn’t the only one concerned about the SEC’s enforcement-focused approach. US Congressman Tom Emmer (R-MN), for example, has repeatedly criticized SEC Chairman Gary Gensler. “Under Chairman Gensler, the SEC has become a power-hungry regulator,” the lawmaker said in July of last year.
Do you agree with SEC Commissioner Hester Peirce? Let us know in the comments section.
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