SEC’s Peirce: Gensler Is Trying To Do Too Much Too Fast

The SEC’s current agenda may be too packed to pass important regulatory guidelines, in crypto or other areas of securities policy, Commissioner Hester Peirce said Monday. 

“Gensler has a tremendous amount of energy, and I think that’s reflected in a very busy regulatory agenda for the commission,” Peirce said during a discussion with Florida International University law students.

“I do have grave concerns about the number of things we’re trying to do at the same time,” she said. 

In terms of recent enforcement actions from the SEC, which many industry advocates argue has slowed progress by targeting companies that are unable to go to court and set a precedent, Peirce said the agency may be putting the cart before the horse. 

“There is a more efficient way to do this,” she added. “If we think that there’s a problem in the industry, we need to deal with it through regulation, and then enforcement should follow the regulation.” 

Before issuing an enforcement action or agreeing to a settlement, regulators might be better off opening the discussion up to public forums to create policy, Peirce said.

“Repeatedly, I have dissented from settlements in this space because I think what we’re trying to do is we’re trying to set the law through these settlements,” the SEC commissioner added. “Why not — for each of these major topics, where we see there to be some sort of securities angle — why not spell that out in some sort of preliminary written documents?” 

In terms of what is next for crypto policy, Peirce said the industry and regulators need to start thinking critically about digital asset use cases. Trading is only one aspect of crypto, she said. 

“But trading can’t be the only thing that crypto is about, and I think critics rightly have pointed to that,” Peirce said. “So ‘listen to your critics’ is another lesson that I think is important for the industry.” 

It’s difficult to put crypto into the current regulatory framework we have for traditional financial markets, Peirce said, but agencies should be encouraged to move faster in order to protect investors and promote innovation. 

“Some people in the regulatory world are perfectly fine with having innovation in crypto move away from the United States because they don’t think that there’s anything positive that’s going to come out of it,” Peirce said. “I tend to be of a different mindset.”

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