The U.S. Securities and Exchange Commission (SEC) commissioner has called for “a coherent and consistent legal framework that works across all asset classes” including crypto assets. She warned that the SEC’s current enforcement-centric approach would take 400 years to pass all crypto tokens that are considered securities.
SEC Commissioner on Crypto Regulation
Hester Peirce, commissioner of the U.S. Securities and Exchange Commission (SEC), discussed crypto regulation in a speech at the “Digital Assets at Duke” conference on January 20.
Noting that securities regulators “pursue registration violations seemingly at random, often years after the initial offering,” the commissioner stressed.
We need to develop a coherent and consistent legal framework that works across all asset classes. Our incorrect application of the law has created arbitrary and destructive outcomes for crypto projects and purchasers.
“When we insist on applying securities laws in this manner,” warns Peirce, “secondary purchasers of tokens are often left with a bag of tokens that cannot be traded or used because the SEC requires special treatment consistent with securities laws.” Since many of these requirements are enforced under strict liability standards, clarification is essential.”
The commissioner continued, elaborating, “Why not set forth a coherent legal framework in the rules?”
After all, if we continue with our current pace of regulatory enforcement approach, we will approach 400 years before we get through tokens that are said to be securities.
“By contrast, the SEC’s rule will have universal – though not retroactive – coverage as soon as it takes effect,” she noted.
Commissioner Peirce further explained that ” A streamlined framework should facilitate compliance with securities laws by honest crypto actors, which will allow the SEC to focus more of its resources on bad actors.”
But she cautioned.
Crypto regulation is not easy to get right. If crypto institutions are treated like regular depository institutions, requiring a heavy layer of capital and many legal personnel, crypto innovation is likely to decline.
This is not the first time Commissioner Peirce has expressed concerns about the way the SEC regulates the crypto sector. She has repeatedly criticized the securities watchdog for taking an enforcement-centric approach to regulating the crypto space. She also believes that regulators should have already approved spot bitcoin exchange-traded funds (ETFs). Last May, she warned that the SEC had dropped the ball on crypto oversight, stating:” We are not allowing innovation to develop and experimentation to occur in a healthy way