In a recent interview with Fox Business reporter Eleanor Terrett, SEC Commissioner Hester Peirce dropped a huge bombshell that shocked the crypto community.
His frank remarks on the Commission’s approach to regulating digital assets have sparked fierce debate among investors, policymakers and industry experts.
What awaits us?
The Bottom Line: Peirce’s Self-Evaluation and Regrets
In a recent statement, Peirce admitted that she felt partly responsible for how the Commission interpreted the Howey Test, a legal framework that determines whether a financial transaction is considered a security and, therefore, whether it falls under SEC oversight.
Peirce regretted not doing more to clarify the legal landscape in the evolving cryptocurrency world. She described the current situation as a “serious example” for other regulators, emphasizing the need for clear and proactive guidance in emerging sectors like cryptocurrency. Her comments underscore the ongoing challenges of regulating digital assets and the need for a more transparent and supportive approach.
What does Gary Gensler do?
Peirce’s remarks come as SEC Chairman Gary Gensler seeks to reinterpret the Howey Test, particularly its “common enterprise” component. Gensler’s move could potentially expand the SEC’s authority, leading to a broader classification of assets, including cryptocurrencies, as securities. The move reflects the SEC’s aggressive tactics to tighten control over the cryptocurrency industry ahead of the November deadline.
Why is the SEC getting aggressive?
Eleanor Terrett also noted that Gensler’s “regulation by enforcement” approach remains active, even through the summer. She suggested that Gensler is rushing to take significant action against the crypto industry before November. This urgency was underscored by OpenSea’s recent announcement that it has received a Wells Notice from the SEC.
The NFT market has expressed concern, saying the SEC’s actions threaten creators and artists in the industry. Terrett’s report highlights the growing tension between regulatory measures and the challenges facing the crypto community.
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