“Just because you are calling something Crypto does not mean you can ignore the rules we have had in place for years, but I do think we also need to be willing to open the doors a little bit wider for innovation.”
— Hester Peirce
Interview location: Washington
Interview date: Tuesday 20th Nov, 2018
Organization: U.S. Securities and Exchange Commission
As the market for cryptocurrencies has grown, so has the oversight from the various regulators who manage the different aspects of the financial markets. Specifically, the SEC has been monitoring, responding to and enforcing the rules by which they regulate the financial markets.
While the SEC initially took a hands-off approach to cryptocurrencies, they have been increasingly providing guidance as to how they view the different parts of the crypto space. From enforcement action against ICOs which are deemed unregistered securities to ruling on proposed rule changes to allow the trade of Bitcoin ETPs, it is becoming clearer that just because a project is a cryptocurrency, it can’t sidestep the rules which have been in place for decades.
The Commission has yet to approve any ETP, so far, rejecting every application. Commissioner Peirce, a vocal proponent of supporting innovation, dissented after the SEC disapproved the proposed rule change to list and trade shares of the Winklevoss Bitcoin Trust on Bats BZX Exchange, Inc.
“I reject the role of gatekeeper of innovation—a role very different from (and, indeed, inconsistent with) our mission of protecting investors, fostering capital formation, and facilitating fair, orderly, and efficient markets. Accordingly, I dissent.”
— Taken from Commissioner Peirce's dissent statement
I was invited by Hester to visit the SEC, and we discussed the role of the Commission, how they make decisions and why she dissented.
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