Want to read Slashdot from your mobile device? Point it at m.slashdot.org and keep reading!

 



Forgot your password?
typodupeerror
×
United States Technology

SEC Commissioner Peirce Publicly Rebukes Her Agency, Gensler on Crypto Regulation (cnbc.com) 44

Hester Peirce of the Securities and Exchange Commission publicly rebuked her agency's crypto enforcement, calling it "paternalistic and lazy" and asking if a "hostile" regulator is the best solution for the industry. From a report: Peirce, who was appointed to her post as commissioner by President Donald Trump in 2018, wrote in a statement on Thursday that she disagreed with the SEC's assertion that the shutdown of crypto exchange Kraken's staking program was a "win for investors." The SEC action against Kraken, which was settled without an admission or denial of wrongdoing, alleged that the exchange engaged in the unregistered offer and sale of securities through its crypto lending platform. Peirce said that's not the primary issue.

"Whether one agrees with that analysis or not, a more fundamental question is whether SEC registration would have been possible," Peirce wrote. "In the current climate, crypto-related offerings are not making it through the SEC's registration pipeline." Without directly mentioning SEC chair Gary Gensler, Peirce took aim at what Coinbase CEO Brian Armstrong described on Wednesday night as the SEC's "regulation by enforcement." Added Peirce, "using enforcement actions to tell people what the law is in an emerging industry is not an efficient or fair way of regulating."

"Most concerning, though, is that our solution to a failure to register violation is to shut down entirely a program that has served people well," she wrote. "However, whether we need a uniform regulatory solution and if that regulatory solution is best provided by a regulator that is hostile to crypto, in the form of an enforcement action, is less clear."

This discussion has been archived. No new comments can be posted.

SEC Commissioner Peirce Publicly Rebukes Her Agency, Gensler on Crypto Regulation

Comments Filter:
  • Hostile (Score:5, Interesting)

    by Joce640k ( 829181 ) on Friday February 10, 2023 @09:15AM (#63281665) Homepage

    asking if a "hostile" regulator is the best solution for the industry

    a) What "industry"? All the recent meltdown has revealed is a load of scammers bilking the public via. thinly disguised Ponzi schemes.
    b) Yes.

    • Yes, there is actually a legit, vibrant and innovative Crypto industry beyond the headlines, every time a bad, centralized actor spectacularly comes crashing down.
      One of the reasons why these scams happen is because the SEC refuses to give proper regulation, and just starts playing tough-guy after the fact. Crypto regulation of the SEC under Gary Gensler is a fucking joke.

      • by gweihir ( 88907 )

        You have no idea how regulation works. Corrupto-Coins _cannot_ be regulated effectively in their current form. It is just not possible. All it would do is create a fake legitimacy that would be far worse than the current state. Well, I guess some assholes want exactly that in order to better be able to defraud the naive and the clueless.

        • You have no idea how regulation works. Corrupto-Coins _cannot_ be regulated effectively in their current form. It is just not possible. All it would do is create a fake legitimacy that would be far worse than the current state. Well, I guess some assholes want exactly that in order to better be able to defraud the naive and the clueless.

          Of course you can regulate them, if you have the will and the right incentives to do so. I fully agree with Hester Peirce's assessment that the SEC has been "lazy" about regulation, and I'm usually not the one to agree with a Trump apointee.

          The first step would be to at least start defining some criterias, such as of decentralization, to have a starting point of which Crypto's constitute securities vs. commodities (to be regulated by the CFTC). Hell, I could give you some good criteria off the top of my hea

          • It's almost as if you think there's only one country in the world and the Internet doesn't exist.

          • by gweihir ( 88907 )

            Of course you can regulate them

            Nope. Not possible and still be meaningful. Or do it meaningfully as that would be simple: Simply outlaw them all.

            Caveat: I am working as an auditor in a regulated industry. I may have some clue what I am talking about.

            • Are you sure? I think you have no clue what you are talking about. Maybe you have a regulatory background, but you seem to be clueless about crypto.

              • by gweihir ( 88907 )

                Are you sure? I think you have no clue what you are talking about. Maybe you have a regulatory background, but you seem to be clueless about crypto.

                I am sure you have no clue, yes. And I do understand crapcoins and all the crime and scams done with them pretty well, thank you.

          • Not that I disagree with your overall point but what you gave are examples not criteria.

            Unless you can give some framework for how you arrived at the conclusion that Bitcoin is a commodity but BNB is a security that could be applied to any arbitrary crypto "thing" you're effectively playing the "I can't define pornography but I'll know it when I see it" game. That doesn't lead to good regulation.

            • I did provide some criteria:
              BNB practically belongs to a company (Binance), the same goes for Tether. But yes, I got derailed there a bit, because I was in a hurry.
              Things are in the works:
              https://twitter.com/InputOutpu... [twitter.com]

              https://www.bbcode.org/edinbur... [bbcode.org]

              • So if I'm interpreting you correctly then the "criteria" you're proposing is "decentralization". Something that is sufficiently decentralized (according to some yet TBD metric) would be considered a commodity while things that are more centralized would be considered a security. That definition doesn't really match my general understanding of those terms in economics (but I am not an economist) and I'm not aware of any legal precedent that would support such an interpretation (but I am not a lawyer).

                But e

                • The problem is that the SEC has displayed absolutely no initiative or strategy in how to move forward on this issue, and is instead shoving it's weight around, trying to bully people into submission while refusing to explain the rules of the game.
                  They could create any sort of legal framework to start with. For example, just declare everything a security until further notice or proven otherwise. Set a team on it to establish the criteria and rules framework. Start talking to people in the industry to come up

          • Bitcoin -
            - cheaper for earlier buyers
            - more and more expensive for later buyers
            - increase in value depends more buyers entering

            That last bit makes it like a Ponzi scheme, with the difference that the underlying asset (the blockchain) is public and consists purely of information, rather than hidden (and sometimes fictitious) asset holdings in a Ponzi scheme.

      • by noodler ( 724788 )

        Yes, there is actually a legit, vibrant and innovative Crypto industry beyond the headlines

        You're bullshitting. The overwhelming majority of crypto action is for the purpose of robbing people, tax evasion and gambling.

    • by gweihir ( 88907 )

      Fully agree. This is what works everywhere. Of course, a "Trump appointee" would either be too stupid to know that or too corrupt to be honest about it.

    • Per the article, there is not really a mechanism currently for crypto exchanges to register with the SEC. So the SEC going after exchanges as unregistered securities trading platforms is what is at issue here.

      Also, the SEC absolutely needs to be given a good long look. On the one hand they are completely dropping the ball on colossal scams like Madoff. On the other they go to great lengths pursuing small time traders over relatively trivial infractions. Go check out Martha Stewart's prosecution, they spent

    • by ebcdic ( 39948 )
      Is a hostile court system the best solution for the burglary industry?
  • Referring to the crypto-scam-ecosystem as an "industry"...

    Who paid? And how much did she get?

    • by chill ( 34294 )

      She isn't a paid shill, she's a true believer. Hester Pierce is a fairly rabid libertarian, anti-regulation, and member of the Federalist Society. She has often expressed views [wikipedia.org] that that markets should be the ones to pare big banks down to size, not government. She was originally proposed by Pres. Obama to fill a vacant Republican seat on the SEC, but the Senate sat on its hands. Pres. Trump renewed the nomination and she was then confirmed by the Senate. Her term is set to end in 2025.

      • by gweihir ( 88907 )

        So the question is, is a fanatic better than a corrupt person? I don't think so.

      • Hester Pierce is a fairly rabid libertarian, anti-regulation

        If this is true, then she's collecting paychecks funded by taxpayer money to work for a government agency whose primary purpose is to regulate, which is something she's ideologically opposed to doing.

  • Now there is someone asking for regulators to be more "friendly" to the crypto scams.

    Heck no. They're too friendly with companies in general.
  • It's not an industry (Score:5, Interesting)

    by rsilvergun ( 571051 ) on Friday February 10, 2023 @09:44AM (#63281743)
    Industries either produce something or provide a service. Money laundering and Ponzi schemes are not services their crimes. Crypto has already been shown to be useless for any legitimate financial service.

    It's not decentralized because regular market forces have already caused it to centralize around five exchanges and a handful of mining pools. Proof of stake is worse because of course it is, you're giving control to whoever owns the most money.

    It's also completely useless as a currency because of course it is. Why would you use a distributed database with all the overhead that comes with and all the potential risks when we have almost 50 years of centralized databases being used effectively for financial transactions. One of the major crypto evangelists just lost millions of dollars to a hack. He's a lead programmer on the Bitcoin project. If that guy can't protect his currency what's your chances?

    It's a failed experiment waiting to be taken out by a handful elementary and necessary regulations of the kind we put in place in the 1920s to prevent huge economic crashes. It's another example of doing something illegal on the internet and getting away with it for a period of time because it takes a while for the authorities to catch up to new technology even when it's just doing the same scams we've done for hundreds or even thousands of years.

    As somebody called it, pretty speedrunning the last 200 years of financial history and regulation
    • by gweihir ( 88907 )

      Obviously, it is not an industry. Obviously basically all the other claims are lies. Nobody outside of the scammers themselves and the fools following them thinks it is an "industry". The scammers wanna scam and the fools are not reachable for rational argument because they are too stupid to see reality.

  • Hester Peirce of the Securities and Exchange Commission publicly rebuked her agency’s crypto enforcement, calling it “paternalistic and lazy” and asking if a “hostile” regulator is the best solution for the industry.

    Perhaps she didn't notice but FTX fucking collapsed. This isn't the time to play nice.

  • On the surface, this looks like a story about a scam-friendly director objecting when her agency actually acts against an occasional thief or two. TFA says she was appointed by Trump in 2018. It's now 2023, and she's still SEC Commissioner even though Biden's been around for more than half of his term. Apparently, she's OK with the idea that crypto markets are little more than a place where grifters go to fleece complaisant, greed-drunk victims.

    I can't help but wonder, though: Why does this corporate kl

    • by colfer ( 619105 ) on Friday February 10, 2023 @10:40AM (#63281881)

      Regarding why she is still there under Biden, read the Wikipedia page on how they are appointed. It's a bipartisan, staggered term structure. Financial reg agencies tend to be that way. As for why Obama first nominated her when he needed to fill a Republican seat, I don't know, but she wasn't confirmed at that time.

    • To elaborate on the other reply. She was nominated in 2018 by trump to fill a vacant seat. That term ended 2020, where trump put her back for a full 5 year term. Biden cannot get rid of her. She will be gone in 2025 unless trump wins in 2024 I imagine.

      Quote from wikipedia, "Hester Maria Peirce is an American lawyer who serves as a Commissioner on the Securities and Exchange Commission (SEC). She previously served as the director of the Financial Markets Working Group at George Mason University's Mercatu
    • by strech ( 167037 )

      I can't help but wonder, though: Why does this corporate kleptocrat still have a job when "socialist" Joe Biden is already more than half way through his first term as US President? A cynical person might suggest it's because once you look past all the social justice posturing to the actual policies of Republicans and Democrats, you can't help but notice they're really just two cheeks on the same arse.

      There are 3 Democratic members already, and by law (15 U.S.C. 78d [cornell.edu]), no more than 3 (out of 5) SEC Commissioners can be of the same party:

      Not more than three of such commissioners shall be members of the same political party, and in making appointments members of different political parties shall be appointed alternately as nearly as may be practicable.

      This is done for a number of financial things (the FTC is the same [cornell.edu]), to maintain "independence", but as 3 (of 5) is generally enough to pass actual rulemaking it doesn't generally matter much. And the Democratic party hadn't really been any better than the Republicans on crypto until the bottom fell out, so while I'm generally dubious of "the parties are the same" stuff,

    • From www.sec.gov:
      "As with other independent agencies, the President cannot remove a Commissioner without cause and the agency does not report or answer to the White House or any part of the administration".

  • All the uses you hear about are ones to which everyone objects for good reason, and yet people still want to have it. Having good regulations that everyone knows about in advance seems appropriate.
  • It's 2023. The crypto industry has had almost a decade and a half to prove they can do something people really want or need, and they've failed.

    She needs to watch this documentary [youtube.com] on blockchain. It lays out how it works and the various false promises it doesn't live up to.

    I get that there's money on the line for some people, but still... this tech really doesn't make any sense.

  • Staking is not an investment = return type of transaction. It is a service to the underlying network that you are then paid for the use of your computing power. I suppose we should outlaw AWS and 365 and half the other "services" that we pay for on the internet as well.
  • Maybe each country needs to set up and recognize and an offical crypto exchange and coin and that's the only group allowed to do crypto in a country, with suitable congressional and executive branch oversite?

  • Hester Peirce of the Securities and Exchange Commission publicly rebuked her agency's crypto enforcement, calling it "paternalistic and lazy"

    Wtf does "paternalistic and lazy" even mean? "Paternalistic" implies that she's referring to a class of "oppressive men", so when she combines that with "lazy" it makes it sound like she wants the oppressive men to work harder at their oppression. It's almost like she's just taking any words with negative connotations and slapping them together, even if the result i

  • We all know that if a police officer simply tells the guy robbing the liquor store at gunpoint "Hey, that's not very nice!", he'll apologize, hand over his gun, return the money, and go get a job bagging groceries. No need for hostility.

  • The protocols worth keeping around are antifragile and will become stronger because of this. Forcing tokens off exchanges to be staked directly by individuals will increase decentralization. If the protocol isnt capable of functioning in the face of bad regulation, it shouldnt exist at all. Ethereum gad made bad design decisions and they are paying the price. Other noncustodial staking protocols where you users can delegate to stake pools without ever losing custody will benefit after the fiat settles.

"Remember, extremism in the nondefense of moderation is not a virtue." -- Peter Neumann, about usenet

Working...