SEC Commissioner Peirce Says New Crypto Law Needed for Clarity and Guidance

Long-time crypto advocate and SEC Commissioner Hester Peirce told the Security Traders Association in Washington today that she would like to see new law to provide clarity for the industry and that she’s been disappointed with the SEC under Chair Gary Gensler.

Peirce described her change in stance over the prospect of legislation relative to optimism when Gensler came to the SEC “with a tremendous amount of knowledge about crypto” as an opportunity to set up a new approach to crypto regulation – namely an oversight regime that indicates when certain disclosure rules apply to certain crypto assets and when.  

“We haven’t really done anything except some enforcement actions,” she said. “So I think it is a good time for legislation.”

The commissioner did, however, gesture at the market chaos of the past seven months, which has spurred interest in new legislative efforts as well as more aggressive regulation of crypto.

“Obviously there are lessons that apply equally to crypto markets as to regular markets and some people in the crypto markets have been learning those lessons recently and people in the traditional markets probably could have warned them of some of those things,” Peirce said.

Peirce's comments come as one of the most conspicuous pushes on crypto legislation would carve out greater authority for the Commodity Futures Trading Commission. The other Republican commissioner at the SEC, Mark Uyeda, has similarly criticized the commission's approach, namely foregoing the rulemaking process in favor of what critics decry as "regulation-by-enforcement."

Peirce is best known in the industry for her Token Safe Harbor Proposal 2.0, which would create a three-year safe harbor period in which developers would be allowed to distribute tokens to facilitate participation in and development of a functional or decentralized network, exempt from the registration requirements of the federal securities laws, so long as certain disclosure and other conditions are met.