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Crypto Owes its Progress to Regulation Delays, says SEC ‘Crypto Mom’

By Katelyn James | February 12, 2019
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Crypto Owes its Progress to Regulation Delays, says SEC ‘Crypto Mom’

Hester Peirce, a Commissioner at the Securities and Exchange Commission (SEC) and informally known as “Crypto Mom”, has acknowledged to a conference (Feb 8) that the slowness in enacting definitive regulation for crypto could be the very thing boosting its evolution.

Peirce is also known in the industry informally as “Crypto Mom” for her dissent of the SEC’s disapproval of a Bitcoin exchange traded fund (ETF) put forth by the Winklevoss twins in late July 2018.

In her speech to the University of Missouri School of Law, she discussed the delays in crypto regulation, saying that the resulting ambiguity is not necessarily a bad thing. By observing the progress of more blockchain projects, regulators might be able to assess the technology more thoroughly.

“Delay in drawing clear lines may actually allow more freedom for the technology to come into its own,” Peirce explained.

She noted that in regulating a new industry, the process might be long but this is necessary in order to balance the development of the industry while also maintaining current legislation.

Yet, there are times where there is too much regulation as well, which can impede several crypto projects by making them “unworkable.” Peirce shared that her preference is not for using enforcement to set the expectations for crypto investors.

“We owe it to investors to be careful, but we also owe it to them not to define their investment universe with our preferences,” she stated. Peirce also believes the SEC’s reluctance on crypto projects could unnecessarily spook investors instead.

Peirce suggests that one way to deal with the situation is to simply treat certain digital assets as a separate asset class. A similar idea has been recently made to the House of Representatives last December to prevent digital currencies from being considered as securities.  

Peirce also made an admission last month that her colleagues could have “a bit more of an open mind” about crypto, while the public should not “hold their breath” waiting for a Bitcoin ETF which “could be 20 years from now or it could be tomorrow”.

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