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US Securities and Exchange Commissioner Hester Peirce has once again voiced her concerns regarding her agency’s stance on cryptocurrencies during a recent event at ETH Denver.
Peirce conveyed her dissatisfaction with the SEC’s inclination to “regulate by enforcement” and criticized the protracted approval timeline for spot Bitcoin exchange-traded funds (ETFs).
In a discussion with CNBC’s MacKenzie Sigalos, Peirce pointed out the SEC’s management of the Grayscale case, which resulted in the endorsement of a Bitcoin exchange-traded product.
“It’s astonishing to me that it required a court to inform us that we had to do that,” Peirce remarked.
“I began in 2018. That summer, we had our first Bitcoin exchange-traded product presented to us as a commission. And I thought back then—which seems quite a long time ago now—we should have approved it.”
Peirce chose not to comment on the pending applications for Ethereum spot ETFs, indicating that they are currently under review by the SEC.
SEC Continues Regulation by Enforcement Against Crypto: Hester Peirce
A significant obstacle within the cryptocurrency sector is the SEC’s dependence on enforcement actions rather than creating clear regulatory frameworks beforehand.
Peirce criticized the agency for its reactive methodology and underscored the necessity of having explicit rules that can be adhered to, instead of depending on enforcement actions after the fact.
“If you genuinely want to differentiate between bad behavior and good behavior, having rules that are clear to those who wish to comply is a far superior strategy than intervening later with enforcement.”
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Peirce advocated for cooperation between crypto advocates and policymakers to formulate ideas that could be enacted when SEC Chair Gary Gensler reassesses his position on cryptocurrencies.
She referred to the idea of a token “safe harbor” that would establish fundamental disclosure requirements and grant projects time to achieve decentralization.
This aligns with her earlier proposal and a bill introduced by U.S. Representative Patrick McHenry in October 2021, which proposes a three-year safe harbor period for crypto startups to demonstrate network maturity and decentralization.
Peirce Acknowledges SEC’s Role in Prosecuting Fraud
During the discussion, Peirce also recognized the SEC’s responsibility in prosecuting fraud.
As reported, the SEC disclosed that its enforcement actions in fiscal year 2023 resulted in nearly $5 billion in penalties and reimbursements to investors.
According to the SEC, the total fines collected between October 2022 and September 2023 were the second-highest amount ever recorded.
However, Peirce stressed the importance of a balanced dialogue regarding regulation, rather than relying exclusively on enforcement actions.
Meanwhile, SEC Chair Gary Gensler has recently been a prominent critic of the crypto sector, cautioning about the industry’s noncompliance.
In September, he acknowledged that while not all tokens can be prejudged, a considerable portion of the crypto industry falls under securities laws but remains non-compliant.
“This crypto space that much of it, without prejudging any one token, much of it is under the securities laws, but unfortunately, much of it is also non-compliant,” he stated.
The post SEC’s Hester Peirce Criticizes Agency’s Crypto Approach as “Strange” appeared first on Cryptonews.
