The US Securities and Exchange Commission’s (SEC Commissioner) has suggested the need for “a coherent and consistent legal framework that works across all asset classes,” including cryptocurrency assets. He warned that the current SEC enforcement-focused approach could take 400 years to process all the crypto tokens that could be considered securities.
SEC Commissioner Urges for Crypto Regulation
The US Securities and Exchange Commission (SEC) Commissioner, Hester Peirce, raised her concerns about cryptocurrency regulation in her speech at the “Digital Assets at Duke” conference on January 20.
Noting that the securities regulator has “pursued registration violations in a seemingly random manner, often years after the original offering,” the commissioner highlighted:
We should create a coherent and consistent legal framework that is applicable to all asset classes. Our crypto stakeholders and projects have suffered from ambiguous enforcement of the law.
“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,” Peirce was very clear. “Many of these requirements apply under a strict liability standard, so clarity is essential.”
The commissioner continued: “Why not establish a consistent legal framework in one rule?” crafting:
If we continue to regulate on the current basis, then we may be 400 years ahead of tokens that could be deemed securities.
“By contrast, an SEC rule would have universal, though not retroactive, coverage as soon as it takes effect,” she is famous.
Commissioner Peirce further noted: “A rational framework should make it easier for legitimate crypto actors to comply with our securities laws, which would free up the SEC to focus more resources on bad faith actors.”
However, she also warned:
Regulating crypto is not an easy task. If crypto firms are treated like other traditional depository institutions, this means they require large amounts of capital and lots of legal personnel. Crypto innovation is vulnerable to slowing down.
This isn’t the first time Commissioner Peirce has raised concerns about the SEC’s best approach to regulating cryptocurrency. The securities watchdog has been repeatedly criticized for adopting an enforcement-centric approach to regulating crypto companies. She also believes a physical bitcoin exchange-traded fund (ETF) should have been approved by the regulator by now. In May she warned, “In my last year, I warned the SEC that they had dropped the ball in crypto oversight. We’re not allowing innovation to unfold and experimentation to occur in a healthy way, and there are long-term consequences of that failure.”
Commissioner Peirce’s SEC’s enforcement-focused approach is not exclusive to the SEC. US Congressman Tom Emmer, R-MN, has repeatedly criticized SEC Chairman Gary Gensler. “Under Chairman Gensler, the SEC has become a power-hungry regulator,” the lawmaker said in July last year.
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