SEC Commissioner Asks Agency Not To Go Hard After Cryptocurrency Products
SEC Commissioner Hester Peirce has come out openly in support of cryptocurrency products saying the agency should not go hard after them. The SEC Commissioner said that the government, based on its own perceived weakness for Bitcoin, should not act as a hindrance in the emergence of new crypto products.
The SEC has turned down several Bitcoin ETFs in the past citing the reason that the Bitcoin’s blockchain technology was insufficient to cater to the customers demand. The agency has also questioned over the lack innovation in the Bitcoin space.
In July, Hester Peirce expressed a formal dissent saying that the job of the agency was not to police on innovation and the future of Bitcoin. What she meant was that the SEC should be more concerned in evaluating Bitcoin and other digital currencies as an asset class, and not the technology behind it.
Reiterating her thoughts last week at the Cato Institute’s FinTech Unbound Conference, Peirce said that the agency should refrain from forcing the cryptocurrency market to comprehensive government regulation.
She said: “The Commission should not default to a demand that the crypto markets be subject to comprehensive government regulation as a precondition to allowing products linked to those markets to be traded in markets that we regulate.”
Peirce, who is also referred as CryptoMom, said that the SEC’s rejection to Winklevoss Bitcoin ETF was based on the concerns of Bitcoin market, instead of the ETF products. She said that if SEC continues to focus more on Bitcoin and the crypto market instead on the products lying atop them, a publicly tradable product could possibly never hit the market.
“The Commission’s order included an assurance that the ‘disapproval does not rest on an evaluation of whether bitcoin, or blockchain technology more generally, has utility or value as an innovation or an investment.’ The order, however, seemed to do almost that. It focused on the alleged flaws with bitcoin markets, rather than on whether the exchange proposing to trade shares of the trust had taken steps to ensure the orderly trading of those shares,” said Peirce.
Commissioner Peirce said that, currently, not many investors have access to the crypto market. For one to get involved in the crypto market requires better understanding and know-how about the market.
“This complexity means that only a very particular type of investor can pursue the diversification opportunities such assets can provide. Entrepreneurs are developing new products through which people can access cryptocurrencies indirectly or hedge their cryptocurrency holdings. Bitcoin futures, for example, began to trade recently.”
She also said that if lack of infrastructure is a major concern for the agency, it should provide additional infrastructure to ensure that the crypto market is accessible to all.