US crypto laws shouldn't assume "everything is a financial asset" says SEC commissioner

By: Dickson Arinze

US crypto laws shouldn't assume "everything is a financial asset" says SEC commissioner

June 29, 2023 2:38 PM

Securities and Exchange Commission Commissioner Hester Peirce presented a potential US crypto legal framework, emphasizing that not all uses are financial.


A commissioner at the United States Securities and Exchange Commission has urged that cryptocurrency regulations in the United States should be "reserved" and not regulate the technology as if every application is financial.


On June 29th, Commissioner Hester Peirce, sometimes known as "Crypto Mom," made a remote appearance at Australian Blockchain Week. When asked how she would regulate cryptocurrency, she responded:


"I think we need to  ensure that whichever regulatory structure you have doesn't simply presume that everything is a financial asset."


Although cryptocurrency is typically discussed in "very financial terms," Peirce argued that it has broader applications, such as facilitating decentralized communication.


"That's useful in the financial context, but it's also useful in the context of building a social media platform or whatever else," she explained.

 


Peirce believes that any legal framework should take "a reserved approach" while yet providing "enough clarity that people feel they can try things."


"There is merit in avoiding a rigid regulatory structure that would limit the potential applications of blockchain and cryptocurrencies."


Aiming an apparent jab at the SEC's present policy, which has been criticized by many (including Peirce), the commissioner stated, The laws can't be reserved then, all of a sudden, [regulators] swoop in just five years later with an array of enforcement actions.


When asked about her cryptocurrency support, Peirce said the SEC "can do better" and that if she couldn't talk freely, "then I don't know why I'm in that position."


"Crypto gives an opportunity for [the SEC] to reconsider how we handle innovation [...] "I really believe we've been taking an inappropriate approach," she remarked.


In reference to the collapse of FTX and the subsequent charges of misbehavior, Peirce recommended the crypto business engage in self-regulation and pay closer attention to counterparty potential risks, disputes of interest, and leverage.