Hester Pierce rises against the SEC for crypto’s existence
The US Securities and Exchange Commission is working hard to ensure that assets are covered by its authority to protect investors’ interests. If it comes into existence, the policy will extend the authority of the SEC from funds and securities to also cover assets.
However, there is a challenge that the SEC needs to tackle first: Commissioner Hester Pierce.
Pierce believes the timeline is strange, and a change like this could hamper its reach to a broader market. She does support the changes, but not this time, which the SEC can only hope will be altered in the future. Commissioner Caroline Crenshaw supports the SEC in its initiatives, saying they would be handy for the ecosystem.
Crenshaw has argued that alternative custody options would turn out to be manipulative, deceptive, and/or fraudulent.
Investors seeking protection require SEC intervention. When the market starts to pick up, the claim that investors will suffer harm from restrictions on their access to cryptocurrencies may be refuted. Estimates are just as erratic as the cryptocurrency market. Investors come first, and the SEC may intervene soon.
The SEC has proposed legislation to protect investors by ensuring that they can place their trust in custodians who will not go bankrupt or run out of reserves. Both incidents are likely to happen at any time, no matter the assurance. The involvement of the SEC is a chance to have more audits and follow-ups with custodians.
The FTX collapse has made this a necessity, and the community has little chance to disagree with the move.
Pierce is believed to support the language, provided the SEC comes at the right time with the right approach. For now, she has withdrawn herself from the proposal and informed respective personnel through an official statement.
What makes Pierce stand firm on her grounds is that the changes being introduced by the SEC will take more time at a higher cost. This is in response to the Safeguarding Advisory Client Assets Proposal released by the SEC on Wednesday. It would mark a departure from current rules, with all the qualified custodians having to ensure they complete new internal control reports.
Pierce is of the view that it would instead drop the ranks of crypto custodians who qualify for the revision since it is difficult to get their hands on the reports.
The proposal further goes on to cover the classification of tokens, a topic that is being discussed almost every day. Here, policymakers understand that cryptocurrencies have to be dealt with like securities, with the other side saying that may not be necessary.