The US Securities and Exchange Commission (SEC) is reversing years of hostility toward crypto thanks to president Donald Trump. Hester Peirce (also known as ‘Crypto Mom’), one of the agency’s longest-serving commissioners and its most outspoken crypto advocate, confirmed on Tuesday that the SEC will no longer use enforcement actions as a substitute for regulatory policy. “During the past several years, enforcement cases have been used as a way to make regulatory policy; that is very atypical,” Peirce said in a live interview on Bloomberg’s Crypto TV segment on Tuesday. “We’re trying to get back to a path where we’re really using our other tools to make policy.” This comes less than a day after the SEC asked a federal court to pause its lawsuit against Binance for 60 days. The regulator sued Binance and its co-founder, Changpeng ‘CZ’ Zhao, in 2023, accusing them of mishandling customer funds, misleading investors, and violating US securities laws. The SEC’s legal team told the court on Monday that a new regulatory framework is being developed and that ongoing cases may need to be reconsidered. Notably, Peirce refused to say whether the SEC would drop the Binance lawsuit entirely, and also declined to comment on whether other lawsuits, including the one against Coinbase Global, could be dismissed. “It’s facts and circumstances,” she said . “We’ll have to look at each case on its merits as we go forward.” Two days after his inauguration, president Trump signed an executive order creating a special advisory group on crypto policy and a national digital asset stockpile. His administration is also considering a national bitcoin strategic reserve. SEC ends its war on crypto “We have been using enforcement cases to set regulatory policy,” Peirce said in her interview. “We’re trying to shift that so we actually set policy and then we bring enforcement cases as needed.” The question of who should regulate crypto—the SEC or the Commodity Futures Trading Commission (CFTC)—has been debated for years. Peirce says the SEC is currently reviewing its jurisdiction and will flag regulatory gaps for Congress to address. In her words: “We’re working on looking at our jurisdiction that we currently have and saying what falls inside that jurisdiction and what falls outside that jurisdiction, then we can point out to Congress where we think there are gaps where maybe something is not covered by our jurisdiction.” Crypto registration, Bitcoin ETFs, meme coins, and the future of the SEC For so long, crypto companies struggled to register with the SEC as the agency, along with the Federal Reserve, made it impossible for banks to even dabble with the industry. Peirce says the agency is now actively fixing that problem. “We’ve just put roadblock after roadblock up against people who are trying to come in and talk to us as we’ve asked them to do or come in and register as we’ve asked them to do and so all I’m asking is that we have an innovation policy that allows people to innovate and that allows people to try new things,” says Perice. Right now, the SEC is processing applications for exemptive relief, which would allow crypto companies to bypass outdated financial rules that were written long before digital assets existed. “We’re looking at all kinds of different adjustments that need to be made,” Peirce said. Also, as Cryptopolitan reported just yesterday, Fed chair Jerome Powell has also said that he would be looking into crypto debanking and hopefully fix the whole situation. Meanwhile, the SEC is also reviewing the classification of crypto trading platforms. Peirce says the SEC’s first step is to determine whether a trading platform deals in securities. If it does, it will be required to register. If it doesn’t, the SEC will back off. Peirce, who has been a longtime supporter of Bitcoin ETFs, also confirmed that the agency is actively reviewing all new ETF applications, particularly those of XRP, Solana, Litecoin, and Dogecoin. Trump’s personal involvement in crypto has of course raised new regulatory questions. Peirce was asked whether the President and First Lady launching their own meme coins makes the SEC’s job more complicated. She refused to comment directly on the matter but did acknowledge that many meme coins may not fall under the SEC’s jurisdiction. “Many of these meme coins probably do not have a home under the SEC’s current regulations.” If Congress or the CFTC wants to regulate them instead, Peirce says, “that’s their call.” Meanwhile, the SEC itself is shrinking. The agency recently extended a deferred resignation program allowing staff to leave voluntarily. Peirce wouldn’t say how many employees had accepted the offer but confirmed that the agency is downsizing and restructuring. “We’re always thinking about how we can do our jobs more efficiently and effectively,” was all she said. Peirce was also asked whether the SEC is overstaffed as Elon Musk’s D.O.G.E department goes on a spending cut rampage. Peirce explained subtly that the SEC will always need enforcement teams, but now those teams will be focused on legitimate violations instead of trying to regulate crypto through lawsuits, so Elon doesn’t have to worry about them. Cryptopolitan Academy: FREE Web3 Resume Cheat Sheet - Download Now
