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

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 […]

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

recent research

Pyth Cover.jpg

Research

Pyth is a low latency pull-based oracle. In a future that looks increasingly high frequency, with various alt L1s and L2s that have significantly shorter block times than Ethereum, and an explosion of “high-frequency” protocols such as oracle or CLOB perp DEXs, Pyth’s low latency oracle product looks much better positioned to capture a significant amount of market share in comparison to competitors.

article-image

Can an ERC-20 token fix science? Coinbase’s Brian Armstrong hopes so

article-image

Roughly $65 billion worth of assets remain on Binance after the exchange agreed to pay, forfeit $4.3 billion Tuesday, Nansen data shows

article-image

The HTX exchange has been hit by a security breach, similar to the recent Poloniex hack

article-image

We have the answers for the usual barrage of questions stuffed with preconceived judgments about Web3, crypto and blockchain

article-image

NFT data will be integrated into CoinGecko APIs in second quarter of 2024, having bought Zash for an undisclosed sum

article-image

Binance and its former CEO have pleaded guilty to federal charges of over $4.3 billion