Hester Peirce Critiques SEC Crypto Regulation Approach
During the “SEC Speaks” event, an initiative was sponsored by the SEC Commissioner Practicing Law Institute. Hester Peirce He expressed criticism of his agency’s regulatory approach to the crypto industry, focusing specifically on Staff Accounting Bulletin 121 (SAB 121).
Peirce, known for his independent views within the Commission, highlighted the complexities introduced by crypto regulations such as SAB 121 and related verbal guidance, arguing that this complicates the regulatory environment for firms involved in the custody of digital assets.
Controversy Surrounding SAB 121
SAB 121 It was published in March 2022 and requires companies that hold cryptocurrency on behalf of their customers to record these assets as liabilities on their balance sheets.
This directive sparked debate between the crypto community and lawmakers over whether such a directive would deter banks from offering custody services for digital assets.
The far-reaching consequences of the bulletin have led to legislative attempts to repeal such an important bulletin. regulatory measures should be passed by the Commission itself, not through staff-level guidance.
SEC’s Public Participation Criticized
Commissioner Peirce argued that the SEC’s engagement with the public has become lax, noting that meaningful interaction between the Commission and stakeholders has diminished.
Peirce points out that some public questions and concerns regarding crypto regulation have been ignored due to a shift in agency behavior that does not encourage proactive communication and transparency.
Legal Response to Crypto Regulation Concerns
In response to the controversy surrounding SAB 121, the House Financial Services Committee took steps to question the status of the bulletin. The committee recently voted to advance a resolution that would invalidate SAB 121 if passed by both the House and Senate.
Supporters of the proposal argue that the bulletin’s demands go against traditional banking practices and could have unintended side effects on the rapidly growing crypto market, including impacts on spot Bitcoin exchange-traded funds (ETFs) was recently approved.
Also read: Pennsylvania “Green Amendment” Dragged In Crypto Mining Pollution Lawsuit
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