The United States Securities and Exchange Commission (SEC) published a list of upcoming new regulatory actions last Wednesday. In a statement released to the public the same day, agency commissioner Hester Pierce denounced the program’s content. She specifically criticized the SEC’s approach to cryptocurrency regulation, calling it risky. Details are provided below.
The SEC’s strategy is incorrect and lacks regulatory clarity.
When the new initiative was announced, SEC Chairman Gary Gensler commented on it, saying that it will help to update the regulations to take into account the economy and technology of the present. Ms. Pierce disputed this idea, claiming that the SEC program had hidden goals and used the wrong strategy to achieve them. The commissioner was making reference to efforts to regulate cryptocurrency exchanges without first attending to the sector’s most pressing demands and to persistent appeals for regulatory clarification.
In fact, the SEC has made a notable proposal to amend the Securities Exchange Act of 1934’s meaning of the word “exchange.” The regulator wants to expand the requirements of exchanges to any technologies that make it easier to buy and sell securities, while being careful to avoid mentioning cryptocurrency. According to Ms. Pierce, “the agenda includes laws that may control cryptocurrency platforms or protocols through an unmarked backdoor, but it does not appear to include rules meant to address significant regulatory issues that have been raised surrounding these assets.”
Quick and aggressive attempt at regulating
The Commissioner, who is well-known for her pro-crypto stances, hasn’t lost sight of the SEC’s mandate to ensure investor protection. She did, however, assure that the regulator’s proposed restrictions for the bitcoin industry were rapidly drafted. Ms. Pierce warned that this might lead to circumstances that cause markets to tremble.
- “ We can avoid creating regulatory backdrafts by recalibrating our agenda to focus on issues critical to protecting investors and the functioning of our markets, and by slowing the pace to ensure that we and the public can reflect on what we do ,” she summed up.
