SEC’s Hester Peirce: We don’t have to regulate crypto through the courtroom

Hester Peirce reiterated Tuesday that court cases are not the only path to regulatory clarity for crypto, but her colleagues do not always agree


SEC Commissioner Hester Peirce | Montinique Monroe for Blockworks


US Securities and Exchange Commission Commissioner Hester Peirce reiterated Tuesday that court cases are not the only path to regulatory clarity for crypto.

“I will say that litigation is not the most effective way to carry out regulations,” Peirce said during an appearance on Bloomberg TV Tuesday afternoon. “Certainly enforcement actions are one tool that we have in our toolbox, but we have other tools.” 

Peirce’s comments come amid reports that Binance and CEO Changpeng Zhao will plead guilty and pay more than $4 billion in a deal with the Department of Justice. Zhao will also step down from his position, according to a Wall Street Journal report.

“I can’t talk about ongoing cases,” Peirce said. “But I will say that with all of these cases that move forward, we should really be thinking proactively about building a regulatory framework…that would work and allow companies to do business in the United States, and that’s what I’m hoping we can work on in the coming months and years.” 

The DOJ, alongside the Commodity and Futures Trading Commission (CFTC), is slated to announce “separate but related cryptocurrency enforcement actions” Tuesday afternoon in Washington, DC. No officials from the SEC will be present, according to a statement from the DOJ. 

The SEC and DOJ did not respond to Blockworks’ request for comment. 

Today’s announcement will include information about the department’s settlement with Binance, according to Bloomberg News. 

In 2023, the SEC upped its number of enforcement actions by 3% from fiscal year 2022, data released last week shows. 

“Fiscal year 2023 was another highly productive and impactful year for the SEC’s enforcement efforts relating to crypto asset securities,” the agency wrote in the report. 

Peirce admitted that she does not always see eye-to-eye with other commissioners, but added that the agency’s approach to the crypto industry as a whole needs improvement. 

“I would take issue with the characterization that I’m an advocate for the industry,” she said. “What I’m an advocate for is people being able to come into the SEC and figure out…what regulations apply, and then comply with those regulations. 

“That’s where I think we’ve fallen down on the job, and I think that’s…where the conflict has sometimes arisen between me and my colleagues.”

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