SEC's Peirce advocates review crypto enforcement actions on a case-by-case basis to promote clarity
The U.S. Securities and Exchange Commissioner (SEC) Hester Peirce recently stressed the need to shift the regulatory approach to cryptocurrencies, which shows a departure from the aggressive enforcement strategies of the past few years.
In the nearest one interview Peirce discusses the SEC's ongoing review of crypto companies' enforcement actions on Bloomberg, highlighting the atypical use of enforcement cases to develop regulatory policies.
SEC's Hester Peirce advocates policy reform
“Over the past few years, law enforcement cases have been used as a way to develop regulatory policies; that is very atypical,” Pierce said. “We are trying to get back on the road to really using other tools to develop policies.”
The SEC's recent suspension of lawsuits demands the world's largest cryptocurrency exchangefurther illustrates this transformation. The committee had previously sued Binance and its co-founder Changpeng “CZ” Zhao in 2023, claiming that the platform was unfortunately client funds and violated securities laws.
The SEC is currently seeking a 60-day stay on the grounds for development for the regulatory framework for digital assets. Peirce avoided commenting on the potential outcome of the lawsuit, emphasizing the need for a case-by-case assessment.
Peirce now leads a cryptocurrency-centric Work Team In the SEC, it is aimed at developing a “comprehensive and clear” regulatory framework. One of her goals is to identify which digital assets are eligible for securities and to identify areas that are not within the jurisdiction of the SEC.
Peirce's previous efforts have received praise from the digital asset community, especially in support of Bitcoin Exchange Trade Funds (ETFs), as well as her objections to various SEC enforcement actions and earned her a “crypto mom” nickname.
Congress does nothing to put encryption classification in trouble
Historically, Congress was unable to pass legislation that explicitly defines cryptocurrency as Crigration, exacerbating the SEC's positive stance on crypto regulations Securities or commodities.
The lack of clarity has led to confusion and legal challenges, including a major court ruling that rejected the SEC's classification of XRP as so-called guarantees, rather than commodities in the Bitcoin case.
Help may arise because the bipartisan legislation of the FIT21 Act (FIT21 Act) is intended to describe the respective jurisdictions of the SEC and the Commodity Futures Trading Commission (CFTC) for digital assets. In addition, another proposed bill aims to establish a special status for Stablecoins.
Pierce has Have been acknowledged before Since the Howey test was first applied to cryptocurrencies in 2017, the “legal inaccuracy and commercial impracticality” featured a SEC approach.
This environment has led to a slow litigation process and has hindered rulemaking, putting many crypto projects in trouble. Looking ahead, Pierce emphasizes the importance of focusing on fraud and misconduct, while also expecting an increase in applications Regulatory relief and non-behavior letters.
She stressed the need for diligent practices during this transitional period to ensure regulatory clarity is achieved for the evolving digital asset market.
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