Peirce: SEC may follow Wyoming's lead in developing new cryptocurrency rules

“Cryptocurrencies raise issues that are not adequately addressed by our existing securities laws,” the SEC commissioner said.

U.S. Securities and Exchange Commission Commissioner Hester Peirce, best known by her nickname “Crypto Mom,” said the regulator may be overwhelmed if it simply incorporates digital assets into its existing regulatory framework.

In an interview with Santander managing director John Whelan at the Asia Pacific Enterprise Ethereum online conference today, Peirce said the SEC could learn from other approaches to regulating cryptocurrencies, specifically calling Wyoming, whose banking board approved charters for crypto firms such as Avanti and Kraken in October, a “particularly progressive” regulator.

In contrast, Peirce said that at the federal level, cryptocurrency and blockchain companies may spend "a lot of money, a lot of time and a lot of pain" waiting for the SEC's regulatory decision but not get the results they want. Peirce said the securities commission's existing regulatory framework may not accommodate such an innovative space.

Hester Pierce at the 2020 Enterprise Ethereum Conference

“I absolutely think we need new rules,” Pierce said. “Our securities laws are designed to be flexible and to stand the test of time, and I think they largely will.”

However, she added:

“I do think that crypto raises some issues that are not fully addressed by our existing securities laws. I would like to see more innovation in regulation.”

The SEC commissioner has previously said that despite the rapidly changing landscape in the cryptocurrency space, regulators have been “very slow to provide guidance.” Still, she encouraged companies to engage with the securities commission and cited the SEC’s rare issuance of no-action letters regarding token issuance. The SEC has issued three such letters, saying it “recommends no enforcement action against platforms that issue digital currencies.”

Peirce began his second term as SEC commissioner in August and will serve until 2025.