SEC’s Cryptomom Peirce Believes US Capital Markets Can ‘Transform People’s Lives’

In a July 7 fireside chat courtesy of Unitize, Commissioner Hester Peirce of the Securities and Exchange Commission continued to advocate for regulatory clarity for crypto as a means of opening up capital markets to innovation.

Innovation and regulation

“I believe in the power of our capital markets to transform people’s lives,” said Peirce. “I wanted to make sure that our regulatory structure was flexible enough to accommodate innovation.” She noted that the the size of the U.S. economy makes its regulations critical to global fundraising:

“The race to the bottom is something we should be concerned about. But that’s all the more reason for a jurisdiction like the United States to try to develop a workable framework that allows people to come and avail themselves of our market.”

Peirce continued to advocate the role of the U.S. government in setting up rules of the road, but also played down innovation coming from the public sector itself:

“Remember that innovation typically comes from outside the government sector. We need to set up a framework that allows people who spend a lot of time thinking about new ideas to continue to spend time thinking about those ideas and not a lot of time worrying about complying with regulations.” 

Limits to SEC jurisdiction internationally

Peirce also spoke on the question of SEC jurisdiction internationally. With digital assets trading largely irrespective of borders, the role of the SEC has proven controversial, as in the Telegram case.  

“It’s certainly a difficult area and it’s a difficult area even without blockchain,” said Peirce. “Even apart from figuring out where jurisdictionally we can go [...] I ask the question ‘is this a good use of our resources?’”

How exactly the SEC determines which projects to pursue remains an enigmatic question, although Peirce did ask industry players to flag bad actors for the commission rather than wait for their investigators to find them on their own.

Safe Harbor proposal

Peirce’s proposed safe harbor for token projects looking to build out networks has attracted a great deal of attention in the crypto sphere. In response to a question about the response, she rejected the notion that the measure “would spark another 2017-type ICO boom.” She compared the situation at the time to current COVID-19 scams, saying:

“When you have anything like crypto that gets a lot of attention in the media you get a group of people who say, ‘oh this is perfect, I’m going to take advantage of this while I can.’”