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SEC Commissioner Peirce says agency should work more efficiently to regulate crypto

SEC Commissioner Peirce says agency should work more efficiently to regulate crypto

The BlockThe Block2023/11/30 20:18
By:The Block

Quick Take Republican Commissioner Hester Peirce said the agency has been unclear on why it charges some crypto firms, versus others, citing the handling of the SEC’s charges against crypto startup LBRY.

SEC Commissioner Peirce says agency should work more efficiently to regulate crypto image 0

The Securities and Exchange Commission needs to work more efficiently and clearly to regulate the cryptocurrency industry, according to one of the agency's key leaders.

Republican Commissioner Hester Peirce, citing the handling of the SEC's charges against crypto startup LBRY, said the agency has been unclear on why it has brought charges against some firms and not others.

The SEC first charged LBRY with selling unregistered securities in March 2021, and it decided to litigate instead of settling. A judge later decided that its token was subject to regulatory oversight and ordered LBRY to pay over $100,000.

Peirce told an audience on Thursday at the Blockchain Association Policy Summit that the LBRY case was a "low point" for her as a commissioner. 

"To some extent, enforcement is always a little bit arbitrary because there are tons of cases that we as a commission can bring in lots of different areas and we have to pick and choose," Peirce said. "We have to make resource allocation decisions. Where does it make sense to spend our resources?"

"We're picking old cases and there doesn't seem to be a rhyme or reason for a lot of the crypto cases we bring," Peirce later added. 

The SEC has sought to reel in the crypto industry, citing a "highly productive and impactful year" that saw charges brought against big names in the sector and celebrities. SEC Chair Gary Gensler has also been consistent in his messaging that crypto firms need to register with the agency and has said most cryptocurrencies are indeed securities.

The better course, according to Peirce

The SEC would be more effective if it first addressed areas where there is "real harm" and then focus on how entities are registered through rulemaking, Peirce later told The Block.

"Each of the individual cases takes a lot of our resources to pursue as well, but if we don't pursue similarly situated facts, people will say well why did you go after this one and not after this one," Peirce said. "I think it's just more efficient for everyone because I also don't love it when people are reading the tea leaves of enforcement actions and trying to figure out what to do."

As for whether the SEC needs more regulatory authority from Congress to oversee crypto, Peirce said lawmakers' involvement would be helpful. Chair Gensler has separately said that regulation is already clear about crypto. 

"I think Congressional involvement would be very helpful in allocating regulatory authority," Peirce said. 


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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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