SEC Commissioner Hester Peirce Warns Against Overregulation of Cryptocurrencies

Too stringent regulation of cryptocurrencies could harm financial innovation, said SEC Commissioner Hester Peirce in an interview with the Financial Times.

I’m concerned that the agency’s first instinct is to seize on this and make it look like the markets I already regulate. I’m not sure that will be good for innovation,” Peirce said.

Commenting on the call by SEC Chair Gary Gensler to Congress to bring regulatory clarity to the activities of bitcoin exchanges, the commissioner noted that regulation does not necessarily have to occur at the federal level.

There may be effective self-regulation,

Peirce also defended what she called the “gamification” of capital markets, where online stock-trading apps, such as Robinhood, use game elements (competitions, prizes, leaderboards) to entice retail investors into trading.

Gamification is not necessarily negative; making financial platforms more user-friendly is not a bad thing,” the commissioner argues.

In her view, the SEC itself needs to engage with investors in a more game-like fashion to convey the risks of such trading.

In May 2020, Peirce stated that an era of SEC leadership under Gary Gensler could be a very productive period for the crypto industry.

The Senate confirmed the nomination of the regulator’s new chairman in April.

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