SEC Commissioner Hester Peirce: Many difficult questions ahead for the DeFi sector

The decentralized finance sector will challenge the regulatory framework and force regulators to ask many difficult questions about what it actually is and how it should be regulated. This was stated by SEC Commissioner Hester Peirce, according to CoinDesk.

Speaking at the LA Blockchain Summit, Peirce stressed that despite the potential for radical change and promises of self-regulation, government oversight of DeFi protocols will be difficult. Earlier she had argued for being less permissive in regulating the decentralized finance sector.

Peirce reminded audiences of her proposal to introduce regulatory holidays for startups conducting token sales, noting that it would not apply to all tokens.

“We may end up with tokens that are ‘stuck’ under securities laws, even though there is no reason for them to be under those laws,” she explained.

The commissioner adheres to this position regarding tokens distributed through airdrops. Despite the SEC’s view that such tokens constitute a form of securities offering, “CryptoMama” believes a free airdrop is different from a sale.

She also believes that many questions remain about the impact of decentralized platforms’ governance tokens on corporate governance.

Peirce’s view diverges from that of her SEC colleagues regarding a regulatory order for the Unikrn startup to pay a $6.1 million penalty for an unregistered token sale. The commissioner found it “quite harsh”.

“In doing so, we sent a signal to startups that there is no place for innovation here,” she emphasized.

The commissioner plans to take account of ongoing industry changes and issue an updated version of her regulatory-holiday proposal. For example, a broader interpretation could apply to the section on token buyers’ protection.

Peirce is also considering issues such as disclosure and technical questions about limiting the pace of founders’ token sales.

“I should create a 2.0 version of the proposal to win people’s trust. I hope to complete this work,” she shared her plans.

Earlier in August, the U.S. Senate approved Peirce for a second term as SEC special commissioner through June 5, 2025.

Earlier she criticised the actions of her colleagues regarding the Telegram Open Network token sale.

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