Hester M. Pierce, the U.S. SEC Commissioner openly discussed cryptocurrencies and ICOs in her speech at the Medici Conference in Los Angeles last week. In her speech, she expressed her intention for the SEC to fully understand cryptocurrencies before setting any regulatory sandboxes around them.
“We must be careful not to let our lack of familiarity with new technology breed anxiety and therefore bad regulation. There is a risk, when something truly innovative comes along, that regulators will focus only on the harms the innovation may bring and miss entirely the opportunity it presents to improve people’s lives.”
SEC and CFTC Taking an Active Interest in Cryptocurrencies
Over the last few months, the U.S. Securities and Exchange Commision (SEC) and the Commodity Futures Trading Commission (CFTC) have been looking into various cryptocurrencies in an effort to crack down fraudulent ICOs and cryptocurrencies that are classified as securities that are operating outside U.S. laws.
Three months ago, the joint hearing between the SEC and the CFTC at Capitol Hill was one of the crucial turning points for cryptocurrencies. In the hearing, Christopher Giancarlo, chairman of the CFTC, showed his optimism and appreciation for the invention of blockchain/DLT technology. By drawing a comparison to the Dot Com bubble in the beginning of this century, he emphasized the importance of this new technology for the future of mankind.
“As we saw with the development of the Internet, we cannot put the technology genie back in the bottle. Virtual currencies mark a paradigm shift in how we think about payments, traditional financial processes, and engaging in economic activity. Ignoring these developments will not make them go away, nor is it a responsible regulatory response.”
Pierce’s Speech In Line With CFTC’s Rhetoric
In her speech titled “Beaches and Bitcoin: Remarks before the Medici Conference”, Pierce used an apt analogy to explain her expectations of the SEC’s role in cryptocurrency regulation.
“I am here today to ask you and others to help us learn more about the technology so that we are able to think about the regulatory obstacles that may stand in the way of crypto-technology’s ability to improve our lives. How can I, in a sense, be a better lifeguard?
On a beach, the lifeguard watches over what is happening, but she is not sitting with sandcastle builders monitoring their every design decision. From her perch on the lifeguard stand, she can spot dangerous activity and intervene with a blow of the whistle or, if necessary, a direct intervention. She always stands ready to answer questions about the rules of the beach. She puts up the red flag to warn of dangerous riptides or sharks.”
"The law deserves respect, but technological progress should not be bound by the limits of the regulator’s lawyerly imagination." SEC Commissioner Peirce gave an incredible speech about tokens and regulation. Read it all: https://t.co/JLaXi4SH7M
— Peter Van Valkenburgh (@valkenburgh) May 8, 2018
As Pierce is one of the senior commissioners at the SEC, she has a good amount of decision making power when it comes to setting regulations for cryptocurrencies. Therefore, it is a good sign that she is willing to acknowledge that she has “much to learn” when it comes to cryptocurrencies and that she wants to be “an eager student” in order to become “a better lifeguard”.