Commissioner for the U.S. SEC Hester Peirce, more commonly know in the industry as Crypto Mom gave a speech for the Texas Blockchain Summit. Therein, she talked about some statements from the SEC Chair Gary Gensler comparing Bitcoin and cryptocurrencies with the “Wild West”.
If government wants to bring law to crypto, it should behave lawfully: https://t.co/bFbwgDGgkp
— Hester Peirce (@HesterPeirce) October 12, 2021
Peirce embraces the term used by Gensler and admitted that the “Wild West” does make reference to a “place we imagine to have been lawless”, but she was able to provide a different angle.
The Commissioner took the metaphor used by Gensler to point out how crypto and the “Wild West” are similar in that the people and communities created around these places want to “build a new future in a more promising place”.
Thus, she talked about a “way forward in crypto regulation” driven by those that, like in the old days, want to escape from “stale societies”. The Commissioner said:
The Western frontier was a place for the adventurous, the rough around the edges, the idealists, the free-thinkers, and the restless.
As that place of the past, the crypto industry is one for the adventurous and idealists. It also currently has some of the harsh and difficulties experienced by those communities looking to create a new world.
Furthermore, the Crypto Mom offered an explanation of the Wild West as somewhere that allows its people to find order and organization beyond the reach of the public sector. Peirce said:
The crypto frontier, like the Wild West, appears pretty wild at first glance: home to lots of codeslingers and speculators and some hucksters too, this new West also has its inter- and intra-protocol fights, friendships forged through shared difficulties and successes, colorful personalities, passions, dreams, hardships, spectacular failures, and remarkable victories.
How Crypto Monitored Itself, Communities Take Control
In that sense, the Commissioner describe a picture that compared cryptocurrencies and their industry not as the SEC Chair and others in the U.S. government attempt to picture it. Rather, Peirce described it as a sector that has been capable of creating its own norms.
After, once wealth was created, governments decided to get involved. The Commissioner added the following:
Because crypto is built on code, the code itself serves as a governor of conduct. But crypto is built on people too, and these people hold each other accountable not only through unbridled public discourse, but through using or not using a protocol.
The Crypto empathized that in the industry, “decentralized communities” and other agents intervene to keep developers and projects in check. This constitutes a form of self-regulation and dismisses those alleging that crypto is inclined to “lawlessness”, as Peirce said.
The Crypto Mom then went on to question the legal clarity around cryptocurrencies and the industry. The SEC’s position seems to be that there is clarity around these assets, but as the action taken against some projects has shown, this has proven to be more complicated in practice. Peirce said:
(…) if the SEC cannot easily articulate an unassailable legal theory for why particular assets are securities, is the line as clear as the SEC maintains it is? The ambiguity ultimately serves us well because it effectively forces any actor with any connection to digital assets into our regulatory jurisdiction.
At the time of writing, the crypto market has resumed its bullish momentum and is approaching pre-crash highs with a total market sitting at $2.36 trillion.