SEC Commissioner Peirce Publicly Rebukes Her Agency, Gensler on Crypto Regulation

Hester Peirce of the Securities and Exchange Commission publicly rebuked her agency's crypto enforcement, calling it "paternalistic and lazy" and asking if a "hostile" regulator is the best solution for the industry. From a report: Peirce, who was appointed to her post as commissioner by President Donald Trump in 2018, wrote in a statement on Thursday that she disagreed with the SEC's assertion that the shutdown of crypto exchange Kraken's staking program was a "win for investors." The SEC action against Kraken, which was settled without an admission or denial of wrongdoing, alleged that the exchange engaged in the unregistered offer and sale of securities through its crypto lending platform. Peirce said that's not the primary issue. "Whether one agrees with that analysis or not, a more fundamental question is whether SEC registration would have been possible," Peirce wrote. "In the current climate, crypto-related offerings are not making it through the SEC's registration pipeline." Without directly mentioning SEC chair Gary Gensler, Peirce took aim at what Coinbase CEO Brian Armstrong described on Wednesday night as the SEC's "regulation by enforcement." Added Peirce, "using enforcement actions to tell people what the law is in an emerging industry is not an efficient or fair way of regulating." "Most concerning, though, is that our solution to a failure to register violation is to shut down entirely a program that has served people well," she wrote. "However, whether we need a uniform regulatory solution and if that regulatory solution is best provided by a regulator that is hostile to crypto, in the form of an enforcement action, is less clear."

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