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SEC Commissioner Hester Peirce has emphasized the need for Congress to establish the regulatory authority responsible for overseeing cryptocurrency markets amid increased scrutiny from the Securities and Exchange Commission (SEC) and growing demands for regulatory clarity.
During the FT's Crypto and Digital Assets Summit, Peirce highlighted the ongoing questions surrounding regulatory jurisdiction in the crypto space, asserting that it is Congress's role to determine the appropriate regulatory agency.
In a congressional hearing on digital assets, various stakeholders expressed the desire to divide specific responsibilities related to cryptocurrencies between the SEC and the Commodity Futures Trading Commission (CFTC).
Peirce's comments come at a time when the SEC is intensifying its crackdown on crypto companies. In recent months, enforcement actions have been taken against industry players such as Coinbase (COIN), Kraken, and Bittrex.
SEC Chair Gary Gensler has consistently emphasized that the issue lies not in a lack of regulatory clarity for crypto platforms but rather in non-compliance with existing rules.
While Peirce previously held the view that existing securities laws could effectively regulate the emerging crypto sector, her perspective has evolved over time.
Peirce explained that the SEC is now attempting to apply regulations suitable for much larger and well-established firms to address issues that could be resolved with simpler measures.
She also discussed the underlying message of a recent SEC rule proposal concerning decentralization in the crypto industry: either comply and become centralized, relocate outside the United States, or face potential dissolution.
However, Peirce refuted the notion that clear regulations in the United States would drive companies to move offshore to evade compliance.
Peirce stated, "If we built a good regulatory regime, people would come. I think you'll see that with Markets in Crypto-Assets (MiCA) regulation in Europe, and I think if the U.S. built one, people would come. It would enable us to differentiate between bad actors and good actors because questions would arise if companies chose to establish themselves in a jurisdiction with no rules. That's why I believe we are undermining ourselves by not having a regulatory framework in the U.S."
Peirce expressed skepticism about the speed of progress within the regulatory system regarding cryptocurrencies, but acknowledged that Congress is currently exploring potential legislation in this domain.
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