About Hester Peirce
SEC Commissioner Hester Peirce, head of the agency’s Crypto Task Force, has participated in several interviews in recent months discussing the SEC’s approach to digital asset regulation. Peirce said the SEC “lost time” under its prior approach to crypto and described the current rulemaking process as “complicated and long.” She stated that the agency is working within a rule set but trying to develop one that serves both its congressional mandate and the objectives of market participants building “real things.” Peirce advised the crypto industry to “build useful things” that meet actual human needs and cautioned that “enforcement is not shut down here at the SEC.”
Peirce expressed support for principles-based regulation and inter-agency harmonization between the SEC and CFTC. She said she would eliminate the accredited investor definition, calling it “contrary to American principles.” Peirce also stated that the SEC’s job “is never about whether the numbers go up or the numbers go down” and that assessing an enforcement program by counting actions is “difficult,” noting she believed some past enforcement actions were “unjustified.” She warned that the SEC “is not there to protect you” if someone takes money or lies to investors, and said regulators should sometimes “allow some immediate pain in order to have a system that is more resilient.”
Source: AI-verified profile updated from Hester Peirce's recent appearances.
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✨ AI-enhanced transcript with speaker attribution
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Interviewer0:05
We've talked about securities and what investors want to avoid, our so-called unregistered security tokens. So that would be like almost like a share of stock, but not registered with the SEC. But on the other hand, a utility token could function something more like a membership rewards point or a loyalty program. Think like frequent flyer miles or like your Starbucks rewards, or even kind of like an in-game currency, like V-Bucks in Fortnite. So can you help us get better at identifying utility tokens?
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Hester Peirce0:46
Well, again, this whole area is somewhat fraught because we've taken quite a broad view of the securities laws. The definition of a security in the United States is very broad. Trying to figure out how that definition applies to different types of things, even outside of the crypto context, can be quite difficult. From our perspective, we're trying to capture anything where someone goes out and says, 'Give me your money, I will build something, and you'll get a return on that.' Now, people have argued a utility token is really a different story. It's a story where people say, 'Here's a token that we're creating that's intended to be the coin of this realm, whatever that realm is.' To participate in the realm, you need to have access to that token. The idea is that you build the network by getting the users excited about using the network, and then the token rises in value as more and more people want to use the network. If it's that kind of a token where people are actually using it for some purpose to access the network, some people have described that as a utility token. I think it is important to underscore again that the SEC has taken a very broad view of how the securities laws apply, and so this is a really fraught area. It's one where people really do need to, as they're thinking about launching a network, they need to think carefully about how the securities laws will apply. Unfortunately, this has led some people to conclude, 'Well, what we're going to do is we're going to gate this network so that no one in the U.S. can participate.' That's exactly the kind of thing that I'm hoping we can address and build a framework that makes sense that again addresses this problem of people buying into networks without enough information. So can we come up with a system where they get the information they need to make the purchase decision, but maybe where we're not loading down those utility tokens with a securities label, which brings with it a whole range of implications?
