Hester peirce sec crypto

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WATCH RELATED VIDEO: Hester Peirce Interview - The SEC \u0026 US Crypto Regulations, Bitcoin ETF, Gary Gensler, Ripple

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She covered which areas would attract scrutiny from the SEC, the lack of a central counterparty to regulate, and her Safe Harbor proposal, which she plans to update. Cryptocurrencies such as bitcoin and ether are classed as commodities which is the turf of the CFTC. So it would require a DEX coder to block numerous unknown assets somehow.

There might need to be a list of acceptable assets. But which assets and who decides? It starts to introduce centralization. And whether or not a digital asset is a security is such a grey area.

Given XRP has its own blockchain protocol, what Synthetix is offering is a derivative. And derivatives are the purview of the CFTC. But several other cryptocurrencies traded on DEXs might be classed as securities. All DeFi lending protocols lend money against digital assets.

And some of those digital assets could be securities. This means most lending protocols are probably involved in securities lending.

However, the regulator identified potential alternative ways to mitigate the risk, such as insurance or creating a system to mutualize any losses. And then when there is a problem, they really want there to be a regulator to go to. And that could be really problematic for people. The regulator made an interesting metaphor that envisages something similar to a DeFi Mullet haircut where the user interface is more conventional for the average person and centralized, and the decentralized activities happen in the background.

Meanwhile, Peirce also talked about the Safe Harbor proposal she made last year. It aims to allow projects, not just DeFi projects, to issue tokens without being classed as securities with a three-year grace period. Plus, it would be subject to anti fraud laws. Image Copyright: BIS. You may also like. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Cookie Settings Accept.

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Does the SEC Have a “Crypto Mom” Problem?

The growth of so-called nonfungible tokens has at least one Securities and Exchange Commission member thinking the agency needs to release guidance on the digital assets this year. Nonfungible tokens, or NFTs, came to prominence as a new form of ownership: a digital asset attached to a piece of artwork or music. The idea has been touted for its potential to represent shares of a company or act as in-game currency for video games. NFT trading volume surged in the third quarter of , increasing by percent from the previous quarter and more than 38, percent year over year, according to DappRadar, a data and analysis company. The surge came as soaring values gave rise to get-rich-quick thoughts among the public. Political candidates and celebrities alike have since launched NFTs. Proponents say they hold value because they are nonfungible, meaning each of them is different from all the others, unlike other crypto assets such as Bitcoin.

SEC Commissioner Hester Peirce is an exception to the rule and is a fierce advocate for the crypto space that has been fighting for sensible regulation.

SEC Commissioner Peirce Weighs in on Crypto and More

Peirce made the proposal in a speech on February 6, Since then, there has been a multitude of enforcement proceedings, repeated disseminations of new guidance and many speeches by some of the top brass at the SEC, each evolving the regulatory landscape. It seemed clear to me that the capital raising efforts through cryptocurrencies were investment contracts within the meaning of SEC v. Howey Co. Not all token issuances and digital assets are used for capital raising, but rather these digital assets are fundamental to the operations of decentralized applications. Amazing new networks are being built and traditional applications are being disrupted at every turn. However, the ability to publicly issue the digital tokens that drive these networks continues to challenge the best practitioners, with all avenues leading back to some form of registration. In theory, an S-1 would work as well, though to date no one has tried and likely will not do so in the short term. Public communication in advance of an S-1 is strictly limited whereas most token offerings rely heavily on pre-marketing.


SEC Commissioner Hester Peirce

hester peirce sec crypto

Hester Peirce, commissioner of the U. The head of the SEC said this month his agency and other regulators are keeping taps on emerging risks in the fast-growing corporate debt market, highlighting assets that could he susceptible to liquidity shocks. Bloomberg -- The lone Republican on the U. Securities and Exchange Commission is warning a recent proposal that would add oversight to systems for trading government securities could also give officials sweeping new powers to scrutinize digital-asset platforms. DeFi allows users to trade, borrow and lend digital assets without having to go through an intermediary.

Senate, and sworn in on January 11,

SEC Cmr. Hester Peirce’s Token Safe Harbor Proposal 2.0: First Impressions

Hester M. Peirce is an American attorney specializing in financial market regulation. A discussion about cryptocurrencies and their compliance requirements in the United States. A lot has happened in the regulatory area around cryptocurrencies in the last year. After a long period of restraint, authoritative legal foundations around digital assets have emerged, particularly in the USA. For example, U.


Hester Peirce Warns Proposed SEC Reform of Securities Trading Platforms Could Threaten DeFi

A second term for Peirce is tremendously good news for the crypto industry at large. It goes where the money is, and where the desire is. People want exposure to Bitcoin in their portfolio. Retail investors, too, love buying ETFs. Her arguments are likely to become more powerful over time — as the crypto market matures, and discussions continue in the Senate , at the IRS and at every level of the American legislature. Given another five years to press this claim, there will be multiple opportunities to convince her SEC Commissioner colleagues. Certainly she is a civil servant who commands respect from both sides of the political aisle, being first appointed in under President Obama, then reconfirmed for a prestigious second term under the current Republican President. A little background on Peirce would probably be helpful here.

Join us on the Digital Asset Report with our Co-Founder, Vince Molinari & SEC Commissioner Hester Peirce on how the crypto regulation should be developed, -.

Hester Peirce Warns Proposed SEC Islahat of Securities Trading Platforms Could Threaten DeFi

Hester Pierce, one of the five SEC commissioners, has warned that the proposal holds potential threats to decentralized finance DeFi platforms. The threat, as she points out, is in the expansiveness of the language which could give the SEC new powers to go after DeFi platforms if it is adopted. DeFi protocols may be in danger of coming under scrutiny warns SEC commissioner, Hester Pierce In correspondence with Bloomberg, SEC commissioner Hester Peirce has called out the US securities regulator for trying to extend its oversight to include decentralized finance platforms.


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Coinbase is among the the voices calling for a new, single U. Cynthia Lummis R-Wyo. The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group , which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights , which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

It does not make express reference to blockchain, DeFi, automatic market-making protocols, etc. If the SEC in fact intends such a result, it is clearly unacceptable, and should be deemed an unconstitutional restraint on free speech.

Peirce explained that the concept of a safe harbor is still in its infancy and did not propose a timeline for the project. Nevertheless, her support is welcome news for the industry, which can hope that her well-stated views will influence the rest of the Commission to move to adopting a separate securities regulatory framework for cryptocurrency. We expect that the SEC will take its time in moving forward with the development and implementation of a safe harbor for token offerings. Peirce explained that in developing its crypto regulatory regime, the SEC can learn from other countries that have taken the lead in developing a regulatory framework for token offerings. Peirce suggests looking at the approach taken by Singapore for the classification of offerings as non-securities, since Singapore does not treat every token offering as a securities offering.

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