The Securities and Exchange Commission is attempting to “plant its regulatory flag," while Congress is still mulling which agency will be police crypto, said Hester Peirce, a commissioner at the regulator.
The SEC has been busy with enforcement actions against crypto firms and individuals, bringing two cases over just the last week. The SEC brought charges against Terraform Labs and its CEO Do Hyeong Kwon over its collapsed algorithmic stablecoin Terra USD on Thursday. Then on Friday morning the agency charged and settled with NBA Hall of Famer Paul Pierce for unlawfully touting a token.
“We’re going to struggle for a while to get to a place where we really are productively regulating it,” Peirce, a Republican commissioner appointed to the agency, told The Block’s Frank Chaparro on The Scoop podcast.
A lot of what happens next is up to Congress and what agency they pick to regulate, Peirce added.
Lawmakers have introduced comprehensive legislation as well as smaller bills to regulate sections of the industry, which would have to be reintroduced this year.
Some legislation may already on the way. Senator Thom Tillis, a North Caroline Republican, is drafting a bill that would require digital asset exchanges and custodians operating in the U.S. to provide an independently verified proof-of-reserves for their assets. Massachusetts Democrat Senator Elizabeth Warren pledged to reintroduce a bill to tighten anti-money laundering rules for crypto firms during a Senate Banking Committee hearing on Feb. 14.
Peirce is often at odds with the other commissioners at the regulator, and just last week was the lone vote against a proposed rule to tighten crypto custody requirements. She spoke on the podcast about how crypto exchanges could be regulated in the future. SEC Chair Gary Gensler has repeatedly said they need to register with the agency.
“One of the problems that you have is that all of these trading platforms are likely to have on them assets that no one thinks are securities,” Peirce said. “And we’re not used to having platforms that trade securities alongside non-securities. That’s going to be an issue that we have to resolve.”
The next two years will be “consequential” for how the cryptocurrency industry develops in the long term, she said.
Correction: Peirce is one of two Republican commissioners currently appointed to the SEC; this article originally stated she was the only Republican on the commission.
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