Speaking to Hester Pierce will give you the distinct impression that she is not pleased with the Securities and Exchange Commission (SEC).
She said that the US Securities regulator has not done a good job of regulating crypto. The commissioner said that in the five years that she had been with the regulator, they have not made any such progress.
Many in the crypto sector often refer to Pierce as ‘Crypto Mom’ and she did not hesitate in highlighting the failures of the agency.
She said that the SEC had failed to offer clarity regarding the regulation of crypto companies. She also added that no regulatory framework had been established in the US that could attract crypto businesses.
Most importantly, she highlighted that no steps have been taken for protecting American investors from dodgy crypto companies that operate outside of its jurisdiction.
She said that if they had a proper regulatory framework for crypto in the United States, then they would be able to see more activity taking place.
However, since there was no framework, most people have a ton of questions, which means that plenty of stuff just happens outside of the US.
This means that when people from the US participate, they are not protected by a regulatory framework.
It is the mandate of the SEC to protect retail investors in the United States and regulate orderly and fair markets.
However, there had been a string of collapses last year in the crypto space, which resulted in numerous bankruptcy filings including Celsius Network, Three Arrows Capital, BlockFi, Voyager Digital, Genesis, and most notably, FTX.
Millions of customers of these companies were left in the lurch after their collapse. Pierce did not talk about the FTX collapse, or its co-founder Sam Bankman-Fried, as the SEC has launched lawsuits against them.
The commissioner has voiced her concerns about how the crypto sphere has been regulated by the agency since her term started during the presidency of Donald Trump.
Just after she had been sworn in for her second term in 2020, she said that things were even more complicated for crypto firms due to patchy guidance from the SEC.
For instance, the 2019 FinHub Framework revealed how to determine if a crypto network is decentralized and whether it can avoid the wrath of the SEC.
However, Pierce said that the measure was not practically applicable because it had too many ambiguities.
There has not been any such progress on crypto regulation since then. In April 2021, Joe Biden appointed Gary Gensler as the chair of the SEC.
Pierce’s new boss has opted to continue with the longstanding policy of the agency of regulation via enforcement.
This means that companies usually learn of their violations and infractions when the SEC takes them to court.
Last year, the SEC had filed a $100 million lawsuit against BlockFi for its interest-bearing product and the previous month saw the agency sue both Gemini and Genesis for selling unregistered securities.