The Securities and Exchange Commission (SEC) faced criticism from Commissioner Hester Peirce, also known as "Crypto Mom," during the "SEC Speaks" event sponsored by the Practicing Law Institute. Peirce highlighted issues within the SEC related to the complexities of staff guidelines, referencing a previous intervention called "The SEC's Garden."

Bitcoin ETF Approval by SEC

The US SEC's approval of Bitcoin ETFs led to a surge in the crypto market, with notable increases in Ethereum and BNB. While the spot ETF was approved by Gensler, Peirce, and Uyeda, Crenshaw and Lizárraga opposed it. Despite global crypto enthusiasts celebrating, the SEC's stance indicates the government's cautious approach to cryptocurrencies.

Analysis by Peirce on the SEC

Peirce criticized the SEC for lacking clear and consistent regulations, hindering financial sector innovation. Dubbed as "Crypto Mom," she emphasized involving the entire commission in regulatory decisions rather than relying solely on staff.

Failure of SEC and Allegations

Peirce dissented severely when the SEC rejected proposals like Gemini's Bitcoin-based ETF and the New York Stock Exchange's Bitcoin-backed ETF listing. She accused the SEC of engaging in merit regulation, limiting ownership of specific securities.

Gensler reportedly faced pressure to approve a bitcoin ETF, emphasizing its practical importance compared to speculative and illicit use of bitcoin. Despite Peirce's apparent conservative stance, media outlets recognize her commitment to improving financial regulations.

SEC's Expansion for Crypto Revolution

In a push to regulate the growing crypto market, SEC Chair Gary Gensler proposed increased staffing to monitor market shifts and reduce investor risks. The plan for 2025 includes adding 148 staff members to boost regulatory capacity, especially in response to rising civil and administrative litigations.

Regulatory Challenges in Crypto Evolution

Regulators struggle to keep up with the evolving crypto landscape due to stretched resources and data inconsistencies. Non-compliance remains a challenge, with various actors not bound by traditional disclosure rules.

In Conclusion

Peirce's critique of SEC practices, coupled with the government's cautious stance on cryptocurrencies, underscores the complexity of regulating the digital asset market. As the relationship between governments and cryptocurrencies evolves, the need for transparent and efficient regulatory frameworks becomes increasingly apparent.