HomeCryptoCryptocurrencies shouldn’t wait for regulators to fix the problems
Cryptocurrencies shouldn’t wait for regulators to fix the problems
January 24, 2023
SEC Commissioner Hester Peirce recommended not ignoring cryptocurrencies in a Duke Conference speech. He believes that the industry also needs to regulate itself to some extent.
US Securities and Exchange Commission (SEC) commissioner Hester Peirce has once again made some positive headlines in the cryptocurrency world. Peirce, affectionately known as “Crypto Mom,” gave a keynote speech at a digital assets conference at Duke University.
Peirce said last year’s crashes offer some important lessons for the future. He clarified that his position was his and did not represent the SEC and other members.
Among the main points he made was that “Crypto’s value proposition depends primarily on the creators of this technology, not regulators like me, who lack technical expertise and are sitting on the periphery looking in.” As such, he believes industry players shouldn’t wait for regulators to fix issues. He says privately designed and voluntarily implemented solutions may work best to achieve this.
He also emphasizes that the purpose of cryptocurrencies is not to earn a profit through trading, but to solve trust issues through technology. In other words, it suggests focusing on useful use cases.
Towards the end of his talk, he says that “rather than swiping left on cryptocurrencies, we should remember that new technologies sometimes take a long time to find their footing.” Instead, he recommends allowing experimentation with the technology and not allowing strict regulation to get in the way.
Hester Peirce does not think Howey’s test can be applied easily
Peirce has made several observations about regulating cryptocurrencies over the years. She has been clear on her stance on crypto bailouts, saying she would not have supported it, especially if the company was overly leveraged. However, you said that the cryptocurrency market had somewhat matured in 2021.
Peirce also disagrees with the current approach to regulation, saying the agency’s currency approach is not bona fide. He also sees problems with applying Howey’s test to cryptographic assets, pointing out that the nuances of a cryptographic test don’t lend themselves easily to testing.
Gary Gensler sees controls as necessary
Peirce’s views on cryptocurrencies contrast quite significantly with the positions of SEC Chairman Gary Gensler. He is adamant on the need for controls and has vowed to crack down on non-compliant crypto companies.
Gensler said FTX’s collapse was part of a pattern in the industry, which is that these companies borrow client funds to invest without proper disclosure. He also believes that cryptocurrency exchanges are highly centralized.
BeInCrypto has reached out to the company or individual involved in the story to get an official statement on the recent developments, but has yet to hear back.