8.2 C
Monday, March 27, 2023

SEC Drops the Ball on Crypto Regulation and There Are Long-Term Consequences, Says Commissioner

SEC Drops the Ball on Crypto Regulation and There Are Long-Term Consequences, Says Commissioner – In an interview with CNBC on the sidelines of the DC Blockchain Summit this week, SEC Commissioner Hester Peirce raised concerns that the US had dropped the ball on cryptocurrency regulation.

- Advertisement -

Peirce, who is known in the crypto community as “crypto mom” for her support of the business, spoke about regulatory challenges in the crypto ecosystem. The commissioner began by mentioning fraud, saying, “There’s a lot of fraud in this space since it’s a hot area right now.”

Also Read: Argentinian Cryptocurrency Exchange Buenbit Announces Staff Layoffs

However, she emphasized that what concerns her the most is the SEC has dropped the ball on crypto regulation. According to Peirce: “The other piece that does concern me is the way that we’ve sort of dropped the regulatory ball.”

“We’re not allowing healthy innovation and experimentation to happen,” the commissioner warned, “and there are long-term implications of that failure.”

- Advertisement -

The cryptocurrency market has plummeted in recent weeks, losing about $500 billion since the beginning of the month.

The collapse of cryptocurrency terra (LUNA) and algorithmic stablecoin terrausd aggravated the market downturn. Within days, the two cryptocurrencies had lost nearly all of their value. The disaster has caused Congress to demand that stablecoins be regulated immediately.

Following the collapse of the two cryptocurrencies, SEC Chairman Gary Gensler predicted that many more crypto tokens would fail, hurting investors. He has stated numerous times that many of the coins offered on cryptocurrency exchanges are securities and should be registered with his agency. 

However, Gensler also emphasized that the SEC does not really have enough resources to adequately police financial markets, claiming that the regulator is really “outpersonned.”  He also stated that cryptocurrency exchanges often trade against their customers.

So far, Gensler’s SEC has been focused on enforcement. Since establishing a unit dedicated to crypto asset regulation in 2017, the Securities and Exchange Commission has taken more than 80 enforcement actions against crypto firms. The agency recently stated that the crypto unit in its Enforcement Division will nearly double in size.

Also Read: Russian Appellate Court Cancels Decision to Block Tor Project’s Website

Peirce reaffirmed the need for regulatory clarity from the SEC, while also pointing out that there is still much work to be done within existing authority. “They need regulatory clarification from us in order to achieve that,” she added, citing traditional financial institutions’ desire to get involved in crypto.

The commissioner expressed his opinion as follows:

“We can go after fraud and play a more positive role in innovation, but we have to get started. So far, I haven’t seen us willing to do that work.”

- Advertisement -

More From Evoclique