SEC Commissioner Hester Peirce told Global Digital Finance’s (GDF) Global Leaders Webinar Series that regulatory clarity from the Securities and Exchange Commission (SEC) is an ‘urgent priority’ for the crypto market and digital assets space.
Speaking in a personal capacity in the webinar with GDF Board member Jeff Bandman, Commissioner Peirce said it is now “a good time for us to take a fresh look at what we are doing in this space”.
Key issues include what is or is not a security as well as clarity on what broker-dealers and investment advisers are allowed to do in the market plus clarity on what the SEC is looking for in products and on what basis it issues denials, the Commissioner said.
“The overarching theme is we need clarity, and the clarity should come from the Commission level. I think we can do something to provide clarity,” she told the webinar.
She highlighted Singapore as a good example of a jurisdiction that is taking a “wise approach” to the regulation of crypto markets and the digital assets space.
Bandman pointed out that the nominee for new SEC chairman Gary Gensler has extensive experience and knowledge of the digital assets space and Commissioner Peirce agreed that could be an advantage.
Commissioner Peirce said she was keen to update her own Safe Harbor approach, which gives companies three years for the offer and sale of crypto tokens without the need for securities laws provision to take effect, with more protection for customers. She supported the need to learn from public consultation as well as other jurisdictions in order to allow innovation to happen and stressed that US partisan politics should not be a barrier as there is a joint understanding of the need for innovation.
The recent Gamestop issue was raised by webinar viewers – Commissioner Peirce stressed that it was natural that regulators were cautious but warned it raised important issues about retail investors participation and ensuring that markets remained accessible.
Bandman added: “It is going to be a very busy year for you, and we are very grateful for your insights and time.”
A recent survey of GDF members reported in the organisation’s 2020 annual report identified a lack of regulatory clarity as the biggest challenge facing the sector this year. Other issues were the readiness of financial institutions for the crypto and digital asset sector, blockchain interoperability, access to banking facilities and then issues around digital identity.