Hester Perice criticizes lack of legal clarity for crypto

The crypto sector may be maturing, but regulatory clarity around the treatment of digital assets continues to remain cumbersome. 

This was recently highlighted by Commissioner Hester Peirce — also known as the United States Securities and Exchange Commission’s (SEC) “crypto mom” — in remarks she made at “The Regulatory Transparency Project Conference on Regulating the New Crypto Ecosystem: Necessary Regulation or Crippling Future Innovation?”

Peirce began her speech by emphasizing the importance of “regulating the new crypto ecosystem.” While this may be, Peirce also noted that the crypto industry is still in search of an actual regulator. She said: 

“A bipartisan bill announced last week attempts to answer that question. Some people in the crypto industry are celebrating the allocation of certain authorities to the Commodity Futures Trading Commission (CFTC) instead of the Securities and Exchange Commission. This view is likely rooted in a disappointment that the SEC has not used more proactively the authorities it already has to sensibly regulate crypto.” 

Everyone asks me when a spot bitcoin ETP will be approved. Here’s my answer: https://t.co/25M5kCDF1Q

— Hester Peirce (@HesterPeirce) June 15, 2022

After noting this, Peirce added that she is “hopeful that we can change course and use our existing and any prospective authorities wisely.” Yet, before explaining how this may be accomplished, Peirce was quick to point out that her criticisms on topics such as the denial of a Bitcoin (BTC) exchange-traded product (ETP) are targeted at the SEC Commission rather than the staff. “The staff appropriately is following the Commission’s lead, and the Commission has not been leading well,” she remarked.

Regulatory matters for crypto industry

While a number of digital asset bills have been passed this year, the first half of Peirce’s speech focused on the approval of a spot Bitcoin ETP in the United States, which she mentioned is the question she gets asked about most. While spot ETPs have successfully launched in other regions such as Europe and Canada — which saw 1 billion Canadian dollars in assets under management a month after its launch in 2022 — the SEC has continued to push back on this offering. 

Unfortunately, Peirce remarked that she still “has no idea” when the SEC would approve a spot Bitcoin ETP, noting that “the Commission has added crypto-specific hurdles to what used to be fairly straightforward…