Peirce: U.S. Crypto Law Cannot Assume 'Everything Is a Financial Asset'

Author: JESSE COGHLAN, COINTELEGRAPH; Compiler: Songxue, Jinse Finance

A U.S. Securities and Exchange Commission commissioner has argued that U.S. cryptocurrency laws should be "reserved," rather than being used as financial regulations every time they are used.

Commissioner Hester Peirce, dubbed "Crypto Mom," appeared at Australia Blockchain Week via teleconference on June 29. When asked how she would regulate cryptocurrencies, she replied: "I think we have to Make sure that no matter what regulatory framework you adopt, you can’t just assume everything is a financial asset.”

While cryptocurrencies are considered a "very financial term," Peirce explained, there are other uses, such as enabling people to interact without the need for a centralized entity. “It’s useful in finance, but it’s also useful in building social media platforms or whatever,” she said.

Protecting investors is important, but the government needs to have a good reason to prevent people from investing their own money as they choose:

— Hester Peirce (@HesterPeirce) June 27, 2023

Peirce argues that any legal framework should take a "reserved approach" but include "clear enough that people feel they can try something".

“It is worth mentioning that it cannot accommodate new uses of cryptocurrencies and blockchain without establishing a flexible framework.”

In what appeared to be a swipe at the SEC's current approach -- which has been criticized by many, including Peirce -- the commissioner said the laws "can't stay, and five years later, the regulator There was a sudden series of enforcement actions."

When asked about her proposal for cryptocurrencies, Peirce said she thinks the SEC "could do a lot better" and believes that if she can't speak freely, "then I don't know why I'm in this position."

"Cryptocurrency presents an opportunity for the SEC to rethink how we innovate ... I really think we've been taking an approach that's not appropriate," she said.

Referring to the collapse of FTX and the ensuing allegations of wrongdoing, Peirce suggested that the crypto industry self-regulate and focus on counterparty risk, conflicts of interest, and leverage.

"These are things you don't need to be told by a government regulator to do, but I think government regulators can play a role in that."