SEC’s Hester Peirce doesn’t know what her agency is trying to accomplish

Commissioner Peirce would have done things differently if she could when it comes to her agency’s crypto enforcement actions

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Hester Peirce, commissioner at the US Securities and Exchange Commission, isn’t quite sure what her agency’s endgame appears to be. 

“There doesn’t seem to be a rhyme or reason for a lot of cases we bring,” Peirce said Thursday during a fireside discussion at the Blockchain Association Policy Summit in Washington, DC. 

Peirce’s agency brought a total of 784 enforcement actions during the 2023 fiscal year, a 3% increase from 2022, largely thanks to SEC Chair Gary Gensler’s escalating interest in the cryptocurrency space. 

The SEC increased its enforcement actions involving securities offerings by 48% in 2023, one of which was the agency’s case against NFT issuer Stoner Cats 2 LLC.

“I don’t really view it as my primary objective” to stop people from purchasing Stoner Cats, Pierce quipped. 

“We need to just also remember that there’s a lot of traditional securities fraud going on, and resources that were spent going after Stoner Cats are not being spent to go after [other actors.],” she added. 

The trend of taking its battles to the courts is not new for the SEC, and Peirce has made her criticism of the strategy known. 

“I will say that litigation is not the most effective way to carry out regulations,” Peirce said during an appearance on Bloomberg TV last week. 

The SEC’s case against LBRY, a saga that eventually ended in the content sharing platform shutting its doors last month, was a particularly troubling instance, Peirce said. 

“I was really heartbroken that we were bringing the case,” she said Thursday. “Here was a project that had actually built a functioning blockchain that was being used…and there had been efforts made to try to launch in a way that was consistent with the securities laws.” 

The SEC has a difficult job determining which enforcement actions to pursue, Peirce said, making the entire process somewhat arbitrary. 

“We have to make resource allocation decisions; where does it make sense to spend our resources?” she said. “[LBRY] is just a case where I would have made a different call.” 

Looking ahead, when asked what she envisioned the SEC’s ‘endgame’ in terms of crypto to be, Peirce didn’t have an answer, but she did have an opinion. 

“I really can’t tell you definitively,” she said. “We need to stick to the mandate Congress gave us and not extend beyond that.”


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