Over the past month and a half, the Security and Exchange Commission (SEC) has started to move from its “aggressive” and “overreaching” crypto regulatory approach to a more welcoming one. Republican Commissioner Hester Peirce has shared some new insight on the US agency’s regulatory shift and the upcoming framework.
Crypto Regulations Aren’t A ‘Game Of Gotcha’
In an interview with Fortune, SEC Commissioner Hester Peirce discussed the regulatory agency’s new industry-friendly approach, led by the newly created Crypto Task Force, to develop a clear framework for digital assets.
Regarding the SEC’s decision to drop most of its ongoing crypto litigations, the Republican Commissioner affirmed that the regulatory agency is “pivoting in terms of how we think about whether to use our enforcement tools and when to use it.”
The SEC’s recent shift has seen the Commission dismiss or pause several litigations against key crypto companies, including Binance, Coinbase, and Kraken, and close many years-long investigations, like Gemini, Robinhood, and Yuga Labs, without taking any enforcement actions.
According to the report, Commissioner Peirce considered most of those litigations “premature” but added that bad actors shouldn’t assume companies with a crypto label will get a “free pass,” as the SEC will “continue to go after ‘run of the mill’ securities violations.”
Moreover, she argued that the law is “not supposed to be a game of gotcha” and “it doesn’t make sense to bring in a lot of courts to look at this issue—a process that takes a long time—when we haven’t sorted it out on our side yet.”
SEC’s Plan To Be Partially Implemented This Year
The SEC’s latest move follows the Trump administration’s efforts to stop the “aggressive enforcement actions,” eliminate “regulatory overreach” on digital assets, and promote the crypto industry’s growth.
Peirce reportedly opposes having a “Mama government” to protect investors from “making bad choices.” She pointed out that people lose money on many things, which would make the SEC’s jurisdiction significantly bigger under that standard.
If the standard of the SEC’s jurisdiction turns on whether you can lose money on buying something, our jurisdiction is massive. But that isn’t the jurisdiction that Congress gave us.
The crypto-friendly Commissioner has previously stated that the regulatory agency is working to “get back to a path where we’re really using our other tools to make policy” instead of using enforcement cases as “a way to make regulatory policy.”
“Some people have really bad scars from past interactions with the SEC,” the Commissioner explained, noting that it was time to step back and revisit things. Peirce suggested that the regulatory agency can get people’s input now that the crypto industry knows they can talk to the SEC’s staff.
According to the report, she affirmed that the SEC would move forward with establishing its crypto regulatory framework despite waiting for Congress’ confirmation of Trump-appointed SEC chairman Paul Atkins and market structure regulations.
Peirce also stated that “pieces” of the agency’s plan would be established this year, including clarification of the security status of digital assets. Last month, she vowed to create a regulatory framework that protects investors and preserves the industry’s ability to innovate and grow.
She closed the interview by sharing that the clear crypto legislation is long overdue, “In my dream world, we would have had it five years ago,” she concluded.
