U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce is sounding the alarm that rigid rules surrounding cryptocurrency could backfire by discouraging potential investors, Financial Times reported on Wednesday (June 7).
The senior-level commissioner has countered her colleagues’ support of instituting stricter mandates and control over the $1.5 trillion cryptocurrency market. Of the five SEC commissioners, Peirce is one of two Republicans. She told FT she was concerned that several regulators in the U.S. want more oversight over crypto.
“I am concerned that the initial reaction of a regulator is always to say ‘I want to grab hold of this and make it like the markets I already regulate’,” Peirce said in an interview with FT. “I am not sure that’s going to be great for innovation.”
Peirce was appointed to the SEC in 2018 by former President Donald Trump and has a background in researching financial regulations at the free-market think tank Mercatus Center. She also was a lawyer on staff with the SEC, per FT.
Peirce’s opinions could suggest that SEC Chair Gary Gensler will see pushback from people inside the agency as he pursues his agenda for tighter crypto controls, per FT.
Numerous agencies in the U.S. government have been brainstorming how best to exert control over the crypto market. The Treasury, as PYMNTS reported, wrote that “cryptocurrency already poses a significant detection problem by facilitating illegal activity broadly, including tax evasion.”
Gensler said during a Congressional hearing that crypto exchanges need to have a regulatory framework with the SEC or the Commodity Futures Trading Commission. How crypto is ultimately defined will determine how it is taxed, which means oversight by the Treasury Department and the IRS.
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