Pro-Crypto SEC Commissioner Slams Agency’s Regulatory Approach

Hester Pierce has issued a public assertion criticizing the U.S. Securities and Exchange Commission’s new regulatory agenda. She described the company’s method as “flawed” and harmful for the nation’s capital markets.

Commissioner Pierce Blasts SEC’s Agenda

Commissioner Hester Pierce has spoken out in opposition to 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 company’s new “Regulatory Flexibility Agenda.” Published the identical day, the agenda contains 53 legislative paperwork that define the quick and long-term regulatory actions that the executive company plans to take.

According to the SEC’s Chairman Gary Gensler, the agenda is pushed by two public coverage targets: persevering with to drive effectivity in U.S.’s capital markets and modernizing the principles for at present’s economic system and applied sciences. “Doing so will help us to achieve our three-part mission: protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation,” Gensler stated in asserting the agenda in a press release.

Commissioner Pierce, nonetheless, disagrees with Chair Gensler’s method to regulating capital markets, noting in her newest assertion 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 points on the core of the company’s mission in favor of “shiny objects” outdoors its jurisdiction. “We once sought to protect retail investors; we now rush to the aid of professional investors,” she stated, including that she believes the SEC in its present type does much less to assist small and rising corporations and as an alternative will increase their prices and shrink their investor base.

Amongst her criticism, Commissioner Pierce additionally addressed the company’s sneaky try to manage crypto protocols—particularly decentralized cryptocurrency exchanges and liquidity suppliers—with out first coping with the trade’s main wants and repeated calls for for regulatory readability. 

“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” within the Securities Exchange Act of 1934.

The stated rule, outlined in a 591-page document revealed in January, fails to make any direct references to crypto belongings or decentralized finance protocols. Instead, it proposed together with all “communication protocols” and methods that facilitate consumers and sellers of securities inside the Exchange Act’s definition of an “exchange.”

Many trade specialists have argued that the proposed rule represents an effort on the SEC’s half to carry decentralized exchanges and cash market protocols beneath its regulatory purview. More importantly, the definition’s excessively broad phrasing dangers redefining all “communications protocols” as potential securities exchanges. As a end result, many notable crypto trade stakeholders, together with Coinbase, Delphi Digital, Coin Center, FTX, and the Blockchain Association, have submitted feedback to the company opposing the proposal.

Commissioner Pierce, answerable for SEC’s Token Safe Harbor proposal, acknowledged that when the company hurriedly writes and implements a myriad of guidelines it creates circumstances that would 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 creator of this piece owned ETH and several other different cryptocurrencies.