Hester Peirce: There’s a Jurisdiction Battle Over Crypto Regulation

Peirce, who the cryptocurrency community has affectionately dubbed ‘crypto mom,’ has long advocated for greater clarity around digital asset policies.

share

key takeaways

  • SEC Commissioner Hester Peirce said that there are many different governing bodies competing to lead digital asset regulation
  • Peirce thinks that more products, including a spot ETF, would benefit investors

It would be in the best interest of investors for a spot bitcoin exchange-traded fund to be approved, but it will take regulators some time to get on the same page, US Securities and Exchange Commission (SEC) Commissioner Hester Peirce said Thursday. 

“I think by withholding from investors exposure to spot products, we’re actually not helping them, we’re actually putting them in a worse position,” she said during the virtual Bloomberg Financial Innovation Summit. “Of course, we do these product approvals on a case by case basis, but I do think that it’s not the best for investors not to give them access to this product.” 

Regulation around digital assets has been slow, Peirce said, in part because there are several governing bodies competing for jurisdiction. Congress has a lot on its plate, and cryptocurrency regulation likely is not at the top of its priorities, she said. The SEC can do some on its own but The Commodity Futures Trading Commission (CFTC), which regulates derivatives markets in the US, also has some jurisdiction claims. 

Regardless of which group leads the charge on establishing boundaries around digital assets, Peirce said SEC Chairman Gary Gensler is going to continue to advocate for strict guidelines. 

“Gensler is a data person,” she said. “He’s thought a lot about data, and so I think that that can be compelling to him. But he also is a big believer, and he’s been very clear that he thinks that having a federal financial regulator of the crypto markets is something he’d like to see.” 

Peirce is less certain that an entirely new regulatory body is the correct answer. 

“We have such a fragmented regulatory system for financial products and services generally that I don’t know that adding another regulator would be my top preference,” she said. 

Peirce, who the cryptocurrency community has affectionately dubbed ‘crypto mom,’ has long advocated for greater clarity around digital asset policies. A lack of concrete rules has prevented innovation in the space, she said. 

In August, Peirce publicly criticized the $10 million fine her agency imposed on crypto exchange Poloniex, claiming that the SEC too often takes an “enforcement-first” approach without appropriate due diligence. Regulators need to take the time to establish reasonable guidelines rather than imposing oftentimes arbitrary punishments, she said. 

Peirce is one of five Commissioners. She was appointed by former President Trump in 2018 after failing to receive Senate approval when former President Obama first nominated her in 2016.

Tags

Upcoming Events

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Avail.jpg

Research

Data publishing costs have historically been a bottleneck for rollups, and as more rollups launch, interoperability will continue to be a major challenge. Avail presents a potential solution to rollup fragmentation through its three products: Avail DA, Nexus, and Fusion, which together aim to unify the web3 experience.

article-image

The Bitcoin halving is a spectacle that only comes round once every four years

article-image

The SEC alleges that Justin Sun spent nearly 400 days in the US from 2017 to 2019

article-image

Short-term “sell the news” reactions could follow new BTC price peaks months from now, industry watchers say — but only if history repeats itself

article-image

While crypto fundraising remains well off its bull market highs, Q1 data shows capital is returning to the space

article-image

Billed as a better BRC-20 fungible token standard, Bitcoin Runes launches tomorrow

article-image

Bitcoin miners need to explore unconventional energy avenues or be buried by the financial realities created by this halving