SEC Commissioner Hester Pierce Says US Crypto Rules Shouldn’t Consider Everything as Financial Assets

Hester Pierce, the pro-crypto SEC Commissioner also popular as crypto mom has once again come in defense of the industry adding that the crypto laws in the US should have some boundaries while not treating everything as a financial asset.

Hester Pierce’s comments came while speaking at the Australian Blockchain Week on Thursday, June 29. During her discussion, Commissioner Pierce was asked as to how would she regulate the crypto industry.

Commenting on this, she said: “I think we have to make sure that whatever regulatory framework you have doesn't just assume that everything is a financial asset.”

Peirce highlighted that while cryptocurrencies are often associated with financial aspects, their potential extends beyond finance, allowing decentralized interactions among individuals. “That’s useful in the financial context, but it’s also useful in building a social media platform or whatever else,” she said.

The SEC Commissioner added that any legal framework for cryptocurrencies in the US should take “a reserved approach” and provide “enough clarity that people feel that they can try things”. “There is something to be said for not putting a framework in place that is so inflexible that it doesn't accommodate the new uses of crypto and blockchain,” she added.

In a veiled criticism of the SEC's strategy, Commissioner Peirce expressed disapproval of reserving laws and later implementing enforcement actions. She added that the laws “can't be reserved then, all of a sudden, [regulators] come in five years later with a bunch of enforcement actions.”

She further believes the SEC can improve its approach and emphasized the importance of speaking freely in her position. “Crypto presents [the SEC] an opportunity to rethink how we approach innovation [...] I really think we've been taking an approach that is not appropriate,” she said.

Referring to the downfall of FTX and the subsequent allegations of misconduct, Commissioner Peirce suggested that the crypto industry should embrace self-regulation and remain vigilant about counterparty risks, conflicts of interest, and leverage.

“Those are things you don't need a government regulator to tell you to do, but I think government regulators can play a role in that,” she said.

Former SEC chair Jay Clayton recently slammed the presiding chair Gary Gensler for filing several lawsuits against crypto firms. Previously, Gensler said that “if we’re not losing cases, we aren’t suing enough businesses”.

Denouncing this, Clayton said that this would mark a fundamental shift in how Americans see the role of the government. “I don’t want to be in a place where the government brings in cases where they think they are going to lose,” said Clayton.