SEC Commissioner and outspoken supporter for cryptocurrency acceptance, Hester Pierce has in another note of emphasis confessed that the regulator turns a blind eye towards companies and developments in the crypto space.
The commissioner of the U.S. Securities and Exchange Commission also states her opinion on why the SEC needs to consider tokens that are sold for use on functioning networks as not being securities as well as reasons to thread lightly with regards to regulations so as not to hinder the potential of the growing cryptocurrency industry.
In her speech at the University Of Missouri School Of Law, the SEC commissioner outlines four (4) feature notes for consideration as regards cryptocurrencies. The points come under the following headings:
Under this heading, Hester Pierce outlines the gloom and doom struggles in the fight to get cryptocurrencies regulated especially with some extreme anti-cryptocurrency stances by a select group of institutions and governments. Mrs Pierce also makes reference to the Howey Test which she asks to be reviewed after its age long application – the test is used to determine whether a financial instrument is a security or not.
Pester argues thus “Is it fair to judge cryptocurrencies based on something that happened before most of us – or even before our parents were born? … Enterpreneurship and innovation do not have the happiest of relationships with regulation.”
A Security or Not?
Earlier, the question as to if cryptocurrencies are a security was answered by the SEC Director Bill Hinman who stated that bitcoin is not a security.
The SEC commissioner (Hester Pierce) further affirms this stance saying “Digital assets should be treated as a separate asset class…Tokens which are sold to be used and are active on decentralized networks are not securities.”
NOTE: If any investment or financial instrument is determined to be a security, it is subject to a list of complex, compulsory and cumbersome rules cum regulations which if not adhered to will have the issuer facing severe penalties.
Ambiguity Not Completely Evil
Here, Pierce says that though regulations could be ambiguous at this time, the degree of ambiguity can be beneficial in the long term. For her, if laws are immediately made clear and concrete from the beginning; then this could limit or restrict growth, adoption and innovation in the space before they ever have a chance to exist in the first place.
In her words “Ambiguity is not all bad. We might be able to draw clearer lines once we see more blockchain projects mature. Delay in drawing clear lines may actually allow more freedom for the technology to come into its own.”
A Word on ETFs
Another topic of concern in the crypto versus regulation agenda is ETFs. Here, Pierce confirms there is an existing demand for cryptocurrency Exchange Traded Funds. She however confesses that the SEC is coming at the crypto ETFs in a ‘merit-based regulation pattern’ which she believes is influenced by personal opinions and emotions of the SEC rather than logical decisions based on legal precedents for that of potential investors in these products.
Extensively she remarks
We rightfully fault investors for jumping blindly at anything labelled crypto, but at times we seem to be equally impulsive in running away from anything labelled crypto. We owe it to investors to be careful, but we also owe it to them not to define the investment universe with our preferences.
These opinions and affirmations further confer on Hester Pierce the title of Crypto mom; an alias the political big wig and SEC commissioner has earned due to her vocal and supportive recommendations as regards cryptocurrency acceptance. Notably, in the case of the previously rejected Bitcoin ETFs, she had come out to question the decision of other SEC members which she claims are based on personal judgement without due consideration to the industry potential; as she notes the bias towards the new asset class.
For the crypto community, Pierce’s support and the current 50-50 pro-bitcoin/crypto support balance of SEC commissioners is a great sign of a possible approval days for the postponed Bitcoin (BTC) ETF decisions which have been scheduled to get a final verdict by late February 2019.