'Crypto Mom' Hester Peirce: Regulation Should Take 'A Productive Path'

Hester Peirce, a Commissioner at the Securities and Exchange Commission (SEC) often referred to as "Crypto Mom," in an interview criticized the agency’s cautious approach to cryptocurrency regulation.

What Happened: Peirce on Wednesday highlighted a fundamental philosophical difference between her and SEC Chair Gary Gensler.

“It’s a fundamental American principle that people are free to make choices,” Peirce told CoinDesk.

“The government is not there to protect people from their own choices. It’s there to protect people if someone else harms them, but not to make their life decisions for them.”

Peirce has consistently supported economic innovation and opposes the SEC’s efforts to block spot Ethereum ETH/USD exchange-traded funds (ETFs), target U.S.-based exchanges like Coinbase COIN and Kraken and heavily oversee crypto markets.

Also Read: Bitcoin ETF Outflows Slow To $19.5M, Hong Kong Targeting April For Bitcoin ETF Launch

The DAO Report: A Missed Opportunity

Peirce criticized past decisions by the SEC, particularly the 2017 DAO Report.

“I think my interest in crypto stems from a couple of things,” Peirce said. “First, I think it’s a good test for how we handle innovation – or maybe a bad test in the sense that I think we’re not passing it. Crypto came to us with a lot of new players and a lot of new ideas.”

“I think we should have figured out how to work with these new players and figure out a way how they could do what they wanted to do in a way that would be compliant, but also allowed them to move forward.”

She believes the DAO Report, which classified a digital token as a security, stifled innovation by failing to adapt regulations to a new asset class. Peirce suggests she would change the way the SEC approaches these matters if given the chance

A “Wait And See” Approach Stifles Businesses

One of Peirce’s biggest frustrations is the SEC’s lack of clear regulations. “We should all take a step back and think about what we’re trying to achieve,” Peirce said.

“And fundamentally, what we need to achieve is the ability for people to know whether or not they’re dealing with a security, so when they do something or sell something they understand whether it's a securities offering.”

Businesses are left in regulatory limbo, unsure of how to comply with unclear guidelines.

Peirce acknowledges the SEC’s challenges. Over the years, the SEC has become more prescriptive in its rule-making approach and less willing to engage on difficult issues with staff and the public.

Peirce believes a more proactive approach is necessary.

She has championed initiatives like the Safe Harbor proposal, which would offer temporary regulatory relief to startups working on decentralized technologies.

Peirce Remains Optimistic For The Future

Despite the current gridlock, Peirce remains optimistic.

“To me, it’s inevitable that we’ll have to take a productive path at some point — so why not start now? What are we waiting for?” she said.

Events like Benzinga’s upcoming Future of Digital Assets conference on Nov. 19 can help bridge the gap between regulators and innovators.

This conference brings together industry leaders to discuss critical issues impacting the cryptocurrency space, including navigating complex regulatory landscapes and strategies for building sustainable crypto businesses.

It’s a crucial event for anyone invested in the future of cryptocurrency.

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