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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Interviewer0:00
Agencies might do to better patrol the space. With us now, SEC Commissioner Hester Peirce. Welcome. And first, Chair Gensler has said most cryptocurrencies are securities. Does the collapse support that based on what you are seeing out there?
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Hester Peirce0:20
Well, I can't talk about specifics of FTX, but generally we have taken a very broad view of what securities are. The Chair has, and I think that is backed up by our effort to provide clarity. But just making broad statements is not sufficient. So this is really a call to action for us to work on providing regulatory clarity.
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Interviewer0:48
And yeah, I mean, you criticize the SEC's overall handling of crypto, saying that the customers aren't in the room, the competitors aren't in the room with you, and the regulator has the leverage because the regulator is about to bring an enforcement action, and it is just not a good way of regulating. Now, I mean, I've seen the crypto industry the last two or three years frankly drunk on its own valuation-driven power. And from my point of view, saying on the one hand they want regulatory clarity, but on the other hand they want to dictate the terms. They say, 'Hey, we want to do crypto lending or we'll call you out, regulators,' or 'Crypto currencies aren't securities even though you say they are.' So what is the healthy way of handling that back and forth?
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Hester Peirce1:39
I think this moment is a learning time for lots of us, both regulators and people in the industry who have invested, may have invested in certain companies and projects and may be rethinking that. But I think having a normal process where you have the public engaging with the regulator through a rulemaking process or through a general exemptive process, yes, understanding that they have an economic interest in what they are saying, but you need to get the input of those involved.
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Interviewer2:29
And do you think the SEC has done enough to protect ordinary investors in crypto, or has the regulator's hands been too tied? Have you done the best within your ability?
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Hester Peirce2:45
No, we haven't done the best. Actions years after the fact are not really the right way to go. Enforcement is certainly part of what we have to do, and I think some of that has really been important. There is a lot of fraud in the crypto space and we've been able to go after some of that. But I think that developing clear rules and helping people who are trying to do the right things figure out how to do that is what we really need to be doing. Obviously, some of this is on the industry itself, and I don't think that we need to wring their hands and wait for us to regulate. There are things that they can be doing: proof of reserves, thinking about the value of on-chain analytics. The purpose of crypto is away from immediate year, and so what we've seen on on-chain analytics can be helpful. So that transparency is really useful.
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Interviewer3:44
Is that another way of saying that the rollout of a specific regulatory framework does not need to have come any sooner than it has?
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Hester Peirce3:53
Oh, no, certainly we should. I mean, I've been saying for the last four years that we should be developing a regulatory framework. My point is just that while we have a job to do that we haven't been doing, and I'm hoping that this catalyzes us to undertake the actual regulatory process, there also is a lot that can be done by people in the crypto industry themselves to provide protection. And you know, the ones that I think we're all particularly concerned about are retail customers who may get caught up in things that they don't really have the...
