SEC Commissioner Peirce Believes Enforcement-Based Regulation is Ineffective for the Crypto Industry

We are broadcasting from the Coin Desk podcast studio presented by Bito, a leading Bitcoin Wallet provider established in 2013. BitGo, the institutional-grade Bitcoin Wallet offered by Bito, is widely recognized for its custody, staking, and settlement services. Bito supports over 800 coins and processes 20% of all Bitcoin transactions by value. Visit bitgo.com to learn more. Welcome back to Coin Desk live from Consensus 2024. I’m Jed Sasi, joined by my co-host Renato Mariati. Our guest today is SEC Commissioner Hester Purse. Welcome to the show, Hester. Thank you, Jen. It’s great to be here. Just a quick disclaimer, my views are my own and not necessarily those of the SEC or my fellow commissioners. It’s great to finally meet you in person after our Zoom calls. The theme of the conference has largely been focused on policy and regulation. What have been your key takeaways from the conversations you’ve been having? Well, I wish the focus of crypto conferences would shift more towards technology rather than regulation. However, discussions around getting the policy right so people can focus on technology have been ongoing. There have been concerns raised about aggressive enforcement tactics by the SEC, which I share. It’s important for us to reset and involve more policymakers in the regulatory process. Collaboration with the CFTC is crucial in defining regulatory responsibilities and ensuring a cohesive approach. It’s essential that both agencies work towards a common goal for the benefit of the American people. Industry participants have expressed frustration with the lack of regulatory clarity in the US, leading some to consider moving operations overseas. We need to create a more attractive environment for innovation within the US to prevent this exodus. The introduction of an innovation sandbox could provide a structured framework for industry players to engage with the SEC and test their ideas in a compliant manner. This could be a stepping stone towards more positive interactions between the industry and the regulator. It’s important to bridge the gap between regulatory compliance and commercial success while ensuring investor protection. The road to implementing the sandbox involves proposing a rule, seeking feedback on eligible activities and operation limits, and eventually launching the sandbox within six months. Many misconceptions exist about the SEC, such as the agency’s focus on crypto, which is just one of many issues on its agenda. The recent approval of a spot Ether ETF was influenced by legal precedents from previous decisions regarding the Bitcoin ETP. The removal of Ether staking from some applications does not indicate the SEC’s stance on staking in the future. Thank you, Commissioner Purse, for sharing your insights with us today. Enjoy the rest of the conference and take care.

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