Republican Commissioner Hester Peirce, also known as “Crypto Mom,” has revealed that the Securities and Exchange Commission (SEC) is actively working on new guidance for crypto firms, independent of Congress’s timeline, as reported by Bloomberg.
Peirce mentioned that agency staff have been diligently crafting guidance since January, utilizing the SEC’s existing authority to clarify how securities laws apply to tokens and on-chain trading, potentially shifting rules through internal memos or staff letters rather than waiting for new federal statutes.
Initiative to Align Securities Rules
SEC Chair Paul Atkins initiated Project Crypto to modernize securities regulations in line with current market trends, indicating positive progress according to Peirce, who mentioned that various agency teams are actively engaging with industry leaders to discuss interpretations of existing laws for token issuers, trading platforms, and custody services.
Industry Feedback on Draft Bill
The US Senate Banking Committee recently introduced a draft market-structure bill aimed at addressing crypto jurisdiction and oversight, which has raised concerns among companies like Ripple regarding potential broadening of the SEC’s authority.
Peirce acknowledged the complexity of the draft legislation and expressed the SEC’s readiness to collaborate with Congress to refine the final text, emphasizing the importance of industry input.
In ongoing efforts to delineate responsibilities between the SEC and the Commodity Futures Trading Commission (CFTC), Peirce highlighted the coordination between both agencies to avoid conflicting regulations and determine the appropriate oversight for various crypto products.
Peirce advised companies operating in token markets to prepare for potential guidance and enforcement actions from the SEC, underscoring the need for compliance teams to align their products with current securities standards and be responsive to regulatory inquiries.
She assured that the agency aims to offer practical guidance while maintaining enforcement capabilities during the guidance development process.
Market Expectations and Uncertainty
With the SEC’s forthcoming guidance and potential updates to the draft bill by Congress, investors may witness market reactions that bring both clarity and uncertainty to the industry.
The SEC’s commitment to leveraging its existing authority could expedite clarity on certain issues, albeit maintaining enforcement risks and unresolved questions regarding the SEC-CFTC jurisdictional boundaries.
Peirce’s insights suggest a proactive approach by the SEC to address industry concerns promptly, emphasizing the importance of ongoing communication and compliance within the evolving regulatory landscape.
Featured image from Getty Images, chart from TradingView
