Commissioner Hester Peirce shared her concerns with the Block & Order podcast.
Peirce was appointed to the SEC by Trump during his first term and took office in 2018.
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Published November 12, 2024 at 5:21 PM EST.
SEC Commissioner Hester Peirce said she worries the agency is unprepared for a presidential administration more hospitable to crypto in an interview on the Block & Order podcast published last week but recorded six days before the election. The subsequent victory of Donald Trump, who promised clearer regulation of crypto under his presidency, added urgency to Peirce’s concerns.
Responding to a question about what she expects from a more crypto-friendly presidential administration in 2025, Pierce said: “What I fear will happen is that (we will have) a more open mind to making good rules, and then (when) they say “Okay, so what should those rules be?” » no one knows what to do.
After the publication of this article, Peirce replied on X. “My point was simply that people inside and outside the agency need to think now about what good crypto regulation looks like,” she wrote. “We need good ideas to fuel public debate. » She then shared a link to a speech she gave the students Wharton Fintech program in which she advocated for the use of small-scale government pilot projects to experiment with new technologies.
Trump’s promises
Trump repeatedly promised during his campaign greater regulatory clarity for the industry under his administration. At the Bitcoin 2024 conference in Nashville, for example, Trump said he would appoint a crypto advisory council that would “design transparent regulatory guidance to benefit the entire industry” during its first 100 days.
Learn more: Trump made promises to crypto voters. If he is elected, what could he actually do?
Trump has also repeatedly promised the crypto community that he would “fire” deeply unpopular SEC Chairman Gary Gensler on the first day of his new administration. While Trump may not have the legal authority to do so, it is highly likely that Gensler is doing so voluntarily. resign from his post, and Trump could also demote Gensler to simple commissioner. Trump’s promise implies that he would replace Gensler with someone whose interpretation of securities law gives the crypto industry more room to innovate.
The SEC rulemaking process
Peirce’s concerns reflect the fact that SEC rulemaking must go through several stages and takes a long time. First, the SEC must devote time to rulemaking in its official agenda, published twice a year. His final order of business was published in July, and his next agenda will likely be published in December, although a new SEC chairman can (and usually does) completely change the agenda if he or she chooses. The Commission must then publish a proposed rule, which is generally available for public comment for about a year, before implementing a final rule.
Sometimes the process takes even longer. Before proposing a rule, the Commission sometimes begins the process by issuing a “conceptual release,” in which it declares a topic on which it wishes to establish rules. This gives the public an opportunity to comment before a proposed rule is even drafted.
Learn more: What Gary Gensler Could Still Do Against Crypto in His Remaining Days as SEC Chairman
A strategy to speed up the process
Although several sources linked to Peirce told Unchained that she did not to want To become the new SEC chair, it is likely that she or Commissioner Mark Uyeda will become acting chair in the short term while the Senate considers approving a Trump appointee to permanently replace Gensler.
JW Verrett, a law professor at George Mason University, who agrees with Peirce that the SEC is not currently ready to propose new rules for the crypto industry, said that this president The acting president could release a concept statement before Senate confirmation if he wants to get a head start. . This would theoretically allow Trump’s crypto advisory board, along with the rest of the industry and Commission staff, to make suggestions immediately after Trump’s inauguration. “That way you get some of that homework done before the new chair even arrives,” Verrett explained.
Learn more: If Trump wins, could Crypto get Hester Peirce as SEC chair?
In her interview on Block & Order, Peirce, who was appointed to the SEC by Trump during his first term and took office in 2018, also reiterated her concerns about how the SEC has pursued NFT issuers such as LBRY and Flyfish Club for offering unregistered titles. . According to Peirce, NFTs used as a means of cataloging digital memberships are not necessarily securities, and the line between these uses of NFTs and securities is unclear. She also urged NFT issuers to attempt to register with the SEC and request “no action letters“, which, if granted, would prevent the SEC from suing them. This, she suggested, could test the limits of regulatory enforcement and help clarify whether NFT creators would be even authorized to register as issuers of securities.
UPDATE (November 12 at 6:05 p.m. ET): Updated with Peirce’s answer to X.
