SEC Commissioner Hester Peirce has called on the cryptocurrency industry to try to solve the problems that have plagued it during 2022 without waiting for regulatory action.
Perth is speech At the Duke University Digital Assets Conference on Jan. 20.
the crypto is on fire
“Much of the cryptocurrency world is on fire,” Perth said, arguing that bad actors have set it on fire.
“The fire that unscrupulous and negligent actors set the crypto world on fire last year offers a lesson for the new year … The people within the crypto industry and those of us who regulate it are terrible, terrifying. , can learn something from not good, very bad 2022.
However, the commissioner also said it will take time for innovative technologies like blockchain to find a foothold, and while new industries are evolving, it could become “downright detrimental” to outsiders. It is possible to see
Peirce said it’s up to people building in the blockchain space, not bystanders and advocates, to establish blockchain’s true value proposition. Additionally, she put the onus on developers to “fix” problems in this area, rather than waiting for regulatory guidance.
“People who believe in the future of cryptocurrencies should not wait for regulators to fix the issues that have surfaced in 2022.”
Regulatory development
Peirce said progress has been made within the SEC regarding crypto regulation. will not be refused registration.
Current SEC processes include notifying projects that enforcement will not take place “if certain conditions are met.” Peirce said he supported a “notification and comment process,” but added that “a flexible application of existing disclosure requirements may be appropriate.”
Peirce said the SEC’s current system needs improvement to make the process smoother for those who want to work within the law. she said:
“The SEC needs to conduct better, more accurate, and more transparent legal analysis … resulting in what one attorney called ‘regulation by anxiety.’ Working in such an opaque environment can be extremely stressful for law-abiding people. “
In addition to recognizing different sectors within the blockchain space, Peirce believes a nuanced approach to crypto regulation may be required. For example, much of the SEC’s regulatory guidance is designed for centralized entities and may not work for decentralized projects.
Perth said:
“A more coordinated crypto disclosure regime would be good for investors and crypto companies.”
Decentralization protection
In a bold statement, Peirce also said built-in DeFi tools could enable the world of decentralized finance to offer self-regulation. she said:
“DeFi deserves special consideration because of its unique characteristics, some of which supersede functions that might otherwise be performed.”
Peirce’s understanding of the nuanced nature of the blockchain space is evident throughout her speech. She also rejected the SBF’s recommendation to subject front-end DeFi portals to regulation rather than the underlying codebase, as it undermines the decentralized nature of the industry.
“Trying to push DeFi into a traditional regulatory framework could result in a system where a few large companies operate registered DeFi front ends. Much like centralized finance.”