SEC Commissioner Hester Peirce slams regulator’s “unproductive” approach to crypto oversight.

The Securities and Exchange Commission’s Hester Peirce criticized the regulator’s approach to cryptocurrency oversight, calling parts of its stance “unproductive” and “unnecessary.”

Peirce, a Republican SEC commissioner nicknamed “Crypto Mom” for her pro-crypto stance, spoke Thursday afternoon at ETHDenver on the agency’s approach to regulating this industry.

The SEC’s enforcement team has been active over the past year, including filing major lawsuits against crypto exchanges Coinbase and Kraken as well as NFT creator Stoner Cats for failing to register with of the regulator.

“You don’t go after people who ask you for clear rules on how to proceed in this space,” Peirce said Thursday. It makes sense to go after bad actors who engage in fraud, Peirce added.

“But when you talk about registration violations, because someone touched a crypto asset, we come years later and say, ah, that’s a security,” Peirce continued, “It seems pointless because you file a complaint against someone when there is no allegation that someone was hurt.”

She added that she was not downplaying the importance of registration requirements.

“But if you’re not willing to tell people what security is, it seems very unproductive to come in after the fact and start blaming people for not checking in,” Peirce said.

SEC Chairman Gary Gensler, who chairs Peirce and three other commissioners, has taken the position that many cryptocurrencies are securities and called on crypto platforms to register with the regulator and comply with its securities laws. The crypto industry, meanwhile, said there needed to be clarity on how the rules applied to them. Coinbase filed a regulatory filing in 2022 seeking new industry-specific rules, but the SEC brush he turns it off and says the existing rules apply.

Lawmakers in Washington have also been working for years on legislation to regulate the industry, but have not yet come close to getting before President Joe Biden to sign it.

A safe harbor

Peirce was also asked Thursday about her Safe Harbor proposal, which she launched in 2020.

The Safe Harbor Proposal “seeks to grant network developers a three-year grace period during which, under certain conditions, they can facilitate the participation in and development of a functional or decentralized network, exempt from the registration provisions of the federal securities”, Peirce said in 2021.

An updated version would require projects to perform biannual updates and analysis explaining why the network is decentralized or functional. Peirce told ETHDenver on Thursday that the industry needs to work on its ideas and “get them ready to go.”

“I always say that maybe President Gensler will wake up tomorrow morning and have an epiphany and he will be in a different place, so we need to have ideas on the shelves, ready to go when that happens” , said Peirce.

The tacit implication: As Gensler’s term as chairman ends on June 5, 2026, a newly elected president, particularly a Republican, may ultimately seek to appoint a new, more industry-friendly SEC chairman. cryptography.

Mom on the spot Ethereum ETF

Peirce was also asked Thursday about the SEC’s position regarding the potential approval of an Ethereum spot exchange-traded fund.

“I’m going to use the attorney’s response again and say this is under review at the SEC,” Peirce said.

Renowned companies, such as loyalty And black rockhave requested a spot Ethereum ETF in recent months as some analysts predict the SEC could approve such products as soon as Can of this year. Others have said it could still take a year or two.

SEC Chairman Gensler suggested The regulator’s decision last month to approve spot Bitcoin ETFs earlier this year should not necessarily indicate how it might respond to Ethereum in the future.

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