SEC Commissioner Hester Pierce spoke at the Securities Enforcement Forum recently voicing her concern that the SEC is holding back innovation. The SEC’s lack of meaningful action in the crypto space will ultimately come back to haunt it unless it acts soon.
SEC Commissioner Hester Pierce had some harsh words for her own regulatory body at the Securities Enforcement Forum. She told the audience that the SEC right now is paralyzed with indecision, but that this could hurt the cryptocurrency space in the long run.
Pierce, of course, believes that new regulations should always be met with caution. However, the SEC is being over-cautious in their approach to their detriment. Recently, the SEC issued a clarification on how to apply the Howey Test to cryptocurrencies. Yet, Pierce asserts this is simply not enough. The released text, she says, is simply too complex without specialist knowledge of securities law. She claims that the law is now even a more “perilous business” than ever before.
“Our Jackson Pollock approach to splashing lots of factors on the canvas without any clear message leaves something to be desired, so we still have work to do in clarifying what factors are the most important in making that determination.”
The SEC’s role should be to guide innovation, not stifle it. Security tokens arguably have the most to lose from this confusion, since they are so tied up with legal uncertainty. With blockchain technology, the regulatory body has the perfect opportunity to be visionary in this emerging industry. Yet, they have failed to provide proper guidance and have been slow to give our approvals. The end result is an agency that is woefully underprepared for the cryptocurrency space, despite having years to familiarize itself.
Pierce, ultimately, is right in saying the SEC is holding us back. She stops short, however, of clarifying what should be done. Perhaps the SEC should start by determining whether or not their existing applications from token issuers are valid.
Hester Pierce has been one of the most outspoken supporters of the cryptocurrency space in the SEC. She was dubbed “CryptoMom” for her positive remarks.
Do you believe the SEC is impeding progress in the security token space? Let us know your thoughts below.
Image courtesy of Bitcoin Magazine.
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