Recently, a SEC commissioner, Hester Peirce, made a case for crypto markets on the topic of self-regulation. Peirce bared her mind on the issue while having a public talk with Gary Gensler, the former Commodity Futures Commission chairman, on March 9th at the MIT Bitcoin Expo 2019.
A Self-Regulating Community
What led to the comments from Peirce was a statement from Gensler who was advocating for a more unified and robust regulatory framework at the national level. This, in Gensler’s opinion, would not only cover trading platforms that issue security tokens or complex investment tools but will also encompass those that list digital assets like Bitcoin. To this Peirce responded saying:
“One really important thing to remember is that people regulate each other in their interactions with one another, and that’s the whole purpose of the Bitcoin idea, that it would be a community that would be able to regulate itself. As problems arise, people in that community are thinking about how to deal with those problems. One model would be to have a government regulator, but I don’t think that’s the only model.”
Gensler belongs to the school of thought that believes that national level regulations should be extended to oversee a wider range of crypto-related activities with the sole purpose of increasing and guaranteeing the protection of investors and taking decisive steps to curb money laundering.
A Different Outcome If Things Were Changed
In the debate with Gensler, which did not go on for long, over the issue of jurisdictional regulatory separation, Peirce stressed on the “status quo,” which gives states the obligation of enforcing money transmission laws under the Bank Secrecy Act, but may however, regulate aspects of the cryptocurrency market with significantly different degrees of latitude.
Going further she said: “that’s the regulatory model we’ve chosen. I think, again, these markets could regulate themselves if we lived in a world where we allowed that.”
Peirce never stopped demanding for a lighter regulatory touch when possible. She, however, agreed that security offerings must meet up with all the requirements needed for registration with the SEC and also lauded the commitment shown by major crypto trading platforms towards the SEC by registering with the agency as either alternative trading venues or as exchanges so that security tokens can be compliantly listed.
Peirce believes that the amount of time put into the establishment of crypto regulation in the US may be all for nothing, as it could afford the industry more freedom to mature at its own pace.