Hester Peirce: ‘Political Lens’ Applied to Crypto is ‘Unfortunate’ Factor

“If we were to seriously all sit down together, we could do this,” Commissioner Peirce said of a framework for crypto in the U.S.

By: André Beganski

January 24, 2024

When it comes to the increasing politicization of crypto on Capitol Hill, partisan views have weighed on the Securities and Exchange Commission’s ability to regulate digital assets sensibly, according to SEC Commissioner Hester Peirce.

In an exclusive interview with Coinage, Commissioner Peirce called out a stance on crypto-related matters that’s been holding the agency back, as it seeks to protect investors, facilitate capital formation, and foster market integrity within the nascent asset class.

“I can say with certainty that my colleagues are thinking about how best to protect investors. That is part of our mission,” Peirce said. “It is unfortunate to see issues like [crypto] really being taken and viewed through a political lens.”

Under the leadership of SEC Chair Gary Gensler, America’s financial watchdog ramped up its scrutiny of crypto-native firms after the collapse of FTX in 2022. As the SEC hit major crypto exchanges like Binance and Coinbase with regulatory enforcement actions last year, bipartisan efforts to craft new rules for the digital assets industry, meanwhile, died on the vine.

Investors deserve disclosures, but one-off enforcement actions are less effective than fostering a fruitful dialogue, Commissioner Peirce said. Calling back to her Safe Harbor Proposal published in 2021, Peirce said a framework for policing digital assets in the U.S. that balances investors’ disclosure needs with personal liberty could happen if it was truly a priority.

“If we were to seriously all sit down together, we could do this,” she said. “We've wasted a ton of time doing other things. And I would like us to stop and change course.”

Even though Gensler’s term is slated to end in 2026, a shakeup could happen if a Republican enters the Oval Office before his time is officially up. When asked if she would be open to assuming Gensler’s leadership position in the event he resigns, Commissioner Peirce demurred, describing the SEC as an institution guided by law as opposed to a single individual.

“One of the things that I want, for my agency and our country as a whole, is to remember that we're not about who the person is sitting in a chair,” she said. “We're about the rule of law.”

To that point, Peirce said an institutional framework for the SEC that works well, no matter who’s in power, is one of the things she’s most passionate about putting in place — even if the framework isn’t necessarily focused on digital assets. 

“We have to remember that this is about getting the institutions right so that we can protect people,” she said. “But protecting people includes protecting their freedom.”

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