SEC Commissioner Hester Pierce Expresses Concerns on Regulatory Delays Hindering Crypto Growth

SEC Commissioner Hester Pierce popularly called as the “crypto mom” in the crypto community has once again expressed her concerns over the ongoing regulatory delay that is hindering the growth of the crypto sector.

Last week, Pierce addressed the regulators while speaking at the Securities Enforcement Forum in Palo Alto, California. She asserted that despite the crypto industry pushing for rapid growth, SEC’s uncertainty and lack of clarity, on regulatory matters, is proving to be a major hurdle.

She further stressed on the fact that it is not SEC’s heavy-handed approach that has stifled growth but rather the agency unwillingness to act. She said: “I worried that hasty regulation would smother the industry in its infancy. My concerns did not become reality. The enforcement actions we have taken to date in the crypto space have—for the most part—exhibited appropriate restraint. On the regulatory side, “hasty” is not the word I would use to describe the SEC’s pace. It is not the SEC’s overzealous action that has stifled the crypto industry, but its unwillingness to take meaningful action at all”.

Commissioner Pierce also expressed her discontent to applying the Howey Test to determine whether the crypto tokens qualify to be treated as a security. She noted that these methods are out-of-date for the newly emerging crypto industry.

However, Pierce also appreciated the SEC for its FinHuB initiative last year in October, that helps to set up a communication between the regulators and the startups in the crypto sector. Besides last month in April 2019, the SEC also released framework guidance for investing in digital assets.

But Pierce stressed that when it comes to regulatory clarity, the SEC isn’t doing enough. She said: “The SEC has yet to provide guidance to the public or FINRA on any of the core questions. The result is that many would-be brokers and trading platforms are stuck in a frustrating waiting mode; they are unable to get clear answers to questions about how they may proceed in this market”.

She said that regulatory measures shouldn’t stifle innovation at any cost. “We should not be trying to guide innovation, but we also should recognize that we cannot stop it and embrace the potential for positive change that innovation offers. Our silence is likely to simply push this innovation and any attendant economic growth into other jurisdictions that have done their work and provided clear guidelines for the market participants to follow,” she added.

Taking a sting at the SEC, the commissioner added: “The U.S. securities markets have historically been the envy of the world; I do not want heel-dragging by the SEC in crypto to mar that well-deserved reputation.”