SEC Commissioner urges quicker crypto regulations

The US Treasury and the UK's FCA have emphasized the importance of cross-border cryptocurrency oversight.

Hester Peirce, a commissioner at the Securities and Exchange Commission (SEC), has issued a warning that the US risks lagging behind Europe in cryptocurrency regulation.

Peirce emphasized the need for a regulatory framework for digital assets in the US, pointing to the European Union (EU) and the UK as potential models.

Speaking during the Financial Times' crypto and digital assets summit, Peirce highlighted the comprehensive regulations outlined in the EU's Markets in Crypto Assets (MiCA) legislation, set to take effect next year.

The UK has also established its own broad regulatory regime, aligning the rules governing crypto tokens with those governing traditional financial assets such as stocks and bonds.

Peirce noted the twin approaches offer valuable insights for the US, highlighting their potential as a guiding framework.

Gensler and Peirce disagree

In contrast to the proactive approach taken by the UK and EU, the US has yet to develop a regulatory framework for crypto assets. Instead, the SEC, led by Chair Gary Gensler, has primarily relied on enforcement actions against crypto-related activities.

Notable firms such as Genesis, Gemini, and Kraken have been targeted by the SEC in this crackdown. The SEC also issued a Wells notice to Coinbase, indicating potential enforcement action related to alleged securities law violations.

Peirce, who often disagrees with Gensler on crypto regulation, advocates for crafting new rules specifically tailored to crypto markets. Gensler contends that existing laws are adequate and clear.

Coinbase criticisms

Others have also criticized the US for its outdated approach to crypto. Coinbase CEO Brian Armstrong recently said the company may consider relocation unless the regulatory regime in the US improves. Professor Omid Malekan has also slammed the US government’s stance on cryptocurrencies as counterproductive and ill-informed.

Concerns have emerged that the US crackdown on digital assets could drive many in the industry to relocate to offshore jurisdictions with more favorable regulatory environments. Peirce countered these concerns, stating that as long as the US takes action and builds a solid regulatory regime for the crypto industry, companies will come flocking.

Working across borders

At the same summit, representatives from the US Treasury and the UK's Financial Conduct Authority (FCA) stressed the importance of cross-border oversight to effectively manage risks associated with the crypto industry. They emphasized the need for supervisors and regulators to have insight into the operations of crypto-asset firms and their subsidiaries.

The FCA's executive director, Sarah Pritchard, stated that the UK's proposed crypto rules would apply to firms marketing to UK consumers, and the regulator would be vigilant in enforcing compliance.

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Written by Silvia Pavlof

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