Commissioner says SEC should ‘gamify our communications with investors’
Lynn Johannson, Advisor, Sustainability and ESG
January 4th, 2024
Lynn Johannson, President of E2 Management Corporation and Catalyst for THE Collaboration
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US financial regulator warns against strict cryptocurrency rules
Financial Post | Kiran Stacey | Jun 9, 2021
Commissioner says SEC should ‘gamify our communications with investors’
A senior US financial regulator has spoken out against attempts by her colleagues to regulate cryptocurrencies more strictly, warning that doing so runs the risk of discouraging investors. Hester Peirce, one of two Republicans among the five commissioners at the Securities and Exchange Commission, told the Financial Times she was worried about the push by several US regulators to play a more active role in the $1.5tn cryptocurrency market.
Her comments expose a split at the top of the SEC just as Gary Gensler, its chair, spearheads an effort to bring the fast-growing cryptocurrency market more in line with other types of financial assets.
“I am concerned that the initial reaction of a regulator is always to say ‘I want to grab hold of this and make it like the markets I already regulate’,” Peirce said in an interview. “ I am not sure that’s going to be great for innovation.”
Peirce previously researched financial regulation at the Mercatus Center, a free-market think-tank, and had worked as a lawyer on the SEC staff. She joined the SEC in 2018 after being appointed by former president Donald Trump.
See: Series of Essays: Regulation in the Era of Fintech
Trump cast doubt on bitcoin in an interview on Monday. “My opinion is . . . the currency of this world should be the dollar,” he told Fox Business Network. “And I don’t think we should have all of the bitcoins of the world out there. I think they should regulate them very, very high.”
US regulators have become increasingly concerned about cryptocurrencies after wild swings in some of the world’s most commonly traded digital assets. This year bitcoin has soared from just under $30,000 to over $60,000, before crashing back to about $33,000, prompting senior government officials to call for greater investor protections.
The Treasury department announced last month it would require cryptocurrency transfers worth $10,000 or more to be reported to the US tax authorities. Officials from the country’s three leading federal bank regulators — the Comptroller of the Currency, the Federal Reserve and the Federal Deposit Insurance Corporation — have begun discussing how best to regulate the market.
Members of the Senate banking committee will meet on Wednesday to discuss the potential merits of a digital currency backed by the Fed, which some hope will provide more stability to the market.
See: FFCON21 On-Demand VIDEO: Interview with SEC Commissioner Hester Peirce
Gensler is pushing to update America’s rules on investing in cryptocurrencies. He told members of Congress last month there were “gaps” in the regulatory system and called for laws to clarify which regulator should oversee crypto exchanges in particular. He added that he wanted to provide crypto investors with similar protections to those they would have at the New York Stock Exchange or Nasdaq.
Peirce’s comments suggest that Gensler will encounter pushback from inside his own agency as he pursues his agenda.
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