We are closing the year with the words of the U.S. Securities and Exchange (SEC) Commissioner Hester Peirce while she looks back at the SEC’s [lack of comprehensive] moves on crypto during 2021.
During an interview with CoinDesk.tv, Pierce noted that the SEC’s change in leadership and the boom of the crypto industry in Washington created a new panorama last year and lawmakers had to reckon that there’s no way around crypto, thus it needs a clear regulatory framework.
As SEC Chair Gary Gensler is famous for seeing everything in the digital assets industry as a security, ‘Crypto Mom’ (the crypto community’s affective nickname for Hester Pierce) noted once more that this has been an aggressive stance.
The SEC’s Wrong Approach
Pierce believes the SEC “has taken the wrong approach to crypto” and they have provided “very little concrete regulatory progress” in 2021, missing the opportunity to discuss regulatory objectives and how to achieve them without hurting the industry.
‘Crypto Mom’ accepts that creating a regulatory framework for crypto is difficult, but believes the SEC could have done more than they did last year and added that they need to start answering basic questions around how the steps they take –like the special broker-dealer option they created a year ago– can actually work in the investors’ favor.
However, Pierce remains hopeful that the SEC will get to work in 2022 and build “something that makes sense in terms of regulatory clarity instead of just always falling back on enforcement”.
The attitude of the SEC has been frustrating to many. Commissioner Peirce thinks that the change of leadership has slowed things down since these kinds of movements bring a new and busy regulatory agenda, which in this case met with a booming industry that desperately needs clarity but is sadly not “the central piece” of the SEC’s to-do list.
Gensler’s agenda says nothing about crypto in it, a huge failure and disappointing approach to take while facing the need to tailor rules for crypto. So why isn’t the SEC working on crafting the terms that could actually help investors?
“There’s an inherent pushback against doing anything special for any new technology”, Pierce alleged.
Related Reading | SEC Chair Calls DeFi A “Misnomer”, Hints At More Regulations
What 2022 Could Look Like For Crypto In The U.S.
Earlier in the year, Pierce released the ‘Token Safe Harbor Proposal 2.0‘. Now, Pierce hopes the SEC could move forward with a stance that “allows people to do a token distribution event without fear that there’s gonna be an enforcement action down the road.”
Less fear would certainly be the key to a 2022 clearer and safer crypto regulatory environment, but as much as Pierces’ comments are a little summer breeze for crypto investors, she also emphasizes the fact that she has not been able to get traction with her SEC colleagues.
The SEC doesn’t seem to be moving toward this Safe Harbor 2.0 project. Pierce noted that Commissioner Crenshaw recently dismissed it as “unnecessary and potentially … harmful to investors”, which in Crypto Mom’s own words is not good progress.
However, she further noted a contrast with the ranking member of the House of Financial Services Committee who added the project to a bill he proposed. And ‘Crypto Mom’ continues to believe that she can potentially convince her colleagues to allow new technologies to move forward.
Pierce stated she didn’t understand the SEC’s recent denial of two Spot-Bitcoin ETFs and claimed the reason behind it was outdated and failed to understand how the market works, blindfolded at the fact that other countries have launched these spot products and reported no problem.
And probably the comment that sums up the obtuse views of many regulators: “Sometimes we treat people as if they’re children when in reality a lot of them are engaged with this fully knowing what they’re doing”, Pierced added to a response about meme coins, and it’s a thought that could extend for a wider comprehension of crypto investors.
Hopefully, [as a new years eve wish] regulators could become more open to commissioner Pierce’s ideas in 2022 and start to understand their role could be way more beneficial by making stances in front of real troubles and giving advice –not prohibition– to investors.
Related Reading | Crypto Regulations Newsletter: A Tale Of Tyrannies & Bitcoin (1/2)