The crypto market saw a massive rally following Donald Trump’s victory in the US presidential elections. Over the past week, industry expectations of the newly elected pro-industry administration have increased as a clearer regulatory framework appears within reach.
However, some believe the Securities and Exchange Commission (SEC) still needs to do more to develop and implement a consumer-friendly approach to the industry.
Regulation by application leaves “no clear path”
SEC Commissioner Hester Peirce recently joined the Block and Order podcast to discuss the future of the US regulatory agency now that a seemingly crypto-friendly administration will enter the office in 2025.
Pro-crypto Donald Trump won the US election against US Vice President Kamala Harris last week. During his campaign, Trump pledged to take a friendly regulatory approach in the country, starting with firing SEC Chairman Gary Gensler and making the United States the “crypto capital of the world.” .
Additionally, the re-elected president promised to conserve the country’s Bitcoin (BTC) holdings and work on a regulatory framework for digital assets created by industry experts to support the sector.
Nonetheless, the SEC has a long history of cracking down on the crypto industry with its “regulation by enforcement” approach. Commissioner Peirce said there are much better ways to use the regulator’s time and resources than “trying to implement this enforcement action by enforcement action.”
Peirce noted that creating a well-tailored framework for the industry alongside investors and experts would be a better approach. “The problem with this enforcement approach is that you end up without a clear path for people to experiment, and you end up with this discouraging environment,” the SEC commissioner added.
Additionally, she suggested that clear guidelines and a “disclosure framework” could help investors understand the risks and rewards of the projects they want to invest in and know the teams and plans behind them.
Is the SEC Ready for a New Cryptocurrency-Friendly Administration?
Commissioner Peirce acknowledged that the SEC’s current approach has created a hostile environment in which investors are confused and crypto companies are afraid to operate in the United States:
It shouldn’t be this way. Of course we will have rules, but we should never put people in a situation where they are afraid to start a business or do business here because they don’t know how the rules are going to apply.
The podcast hosts stressed that developing the new US regulatory framework could take a few years. However, Peirce emphasized that the United States has the advantage of learning from what works in other countries.
She also stressed that the US regulator needs to resolve some issues, including speeding up the review process and being more “open-minded”. The SEC commissioner expressed concerns about the approach of the new administration, which had not been elected at the time of the interview’s recording, noting that at first, “no one knows what to do “.
Peirce suggested that it will be essential to be prepared with good ideas as the new administration takes office. She further clarified in an article X that “people inside and outside the agency need to think now about what good crypto regulation looks like.”
Ultimately, Peirce believes that “we need good ideas to fuel a public debate” that could prepare the new administration and US regulators for the change in approach.
Total crypto market capitalization is at $2.9 trillion in the weekly chart. Source: TOTAL on TradingView
Featured image from NBC News, chart from TradingView.com
