The SEC’s Hester Peirce Isn’t a Bitcoin Champion, Just a Regulatory Realist

Stan Higgins
Aug 1, 2018 at 08:00 UTC
Updated Aug 2, 2018 at 03:50 UTC
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Regulators like the Securities and Exchange Commission shouldn’t be acting as gatekeepers to new technologies like bitcoin, according to Commissioner Hester Peirce.

Peirce’s remarks, made during an interview with CoinDesk, follow the agency’s decision to confirm the 2017 rejection of a bitcoin-tied exchange-traded fund backed by Cameron and Tyler Winklevoss, which reinforced the argument made in a publicly-issued dissent published alongside last week’s announcement.

According to Peirce –  who was sworn into office this past January and previously served as a staffer in the U.S Senate – the decision actually does a disservice to investors who are operating in the market.

“From my perspective, we need to be mindful of what our role is, and it’s not to be the ones who decide which innovations and which technologies get through and which ones don’t,” Peirce told CoinDesk.

She added:

“I think that’s a very dangerous position to put ourselves in, and I think it really does harm investors because it denies them opportunity.”

Perhaps unintentionally, Peirce’s dissent made her a kind of hero in the eyes of the crypto community, netting comparisons to the effect comments made by Commodity Futures Trading Commission (CFTC) chief J. Christopher Giancarlo had on his own social media following earlier this year.

In the days following what were perceived as his positive remarks about the technology, Giancarlo was quickly dubbed “Crypto Dad,” a nickname that’s now been extended to Peirce, who some have sought to label the “Crypto Mom” of seemingly supportive U.S. regulators.

But according to Peirce, her statement on Friday wasn’t intended as a remark in support of bitcoin; rather it’s in defense of new technologies and the people who invest time and resources in developing them.

“I’m not taking a view whether bitcoin is going to succeed or fail. I’m excited by the fact that people are thinking of new ways to do things,” Peirce told CoinDesk. “Bitcoin is one of those things, blockchain is one of those things, other cryptocurrencies – but again I’m not weighing on any particular innovation or any particular asset.”

Requirements satisfied

According to Peirce, the Winklevoss proposal was worthy of approval.

In both interview and in her Friday statement, Peirce argued that Bats BZX Exchange, the exchange that filed the proposed rule change and pushed for a review following the rejection by agency staff in March 2017, had satisfied the requirements as dictated by the Securities Exchange Act.

She argued that it was wrong for the agency to focus on manipulation in the spot market for bitcoin and that the risks in question were taken into consideration when BZX made its pitch to the SEC.

“I think the exchange, in making a decision to list this particular product, had looked into whether it thought investors were interested in it, and if investors are interested in it, I don’t see why we should stop them from having access to it.”

Indeed, in her Friday statement, Peirce contended that “approval of this order would demonstrate our commitment to acting within the scope of our limited role in regulating the securities markets.”

“If someone is trying to raise money for a legitimate project, as long as the person explains what he’s trying to do and what he’s going to do with the money that reveals everything material that investors need to know – I don’t think we should stand in the way,” she later told CoinDesk.

Nothing to follow?

Support or not, Peirce’s remarks earned her a big boost in Twitter followers, which as of the time of writing stands at roughly 15,800. Data from analytics site SocialBlade shows that at the start of the month, her follower count was at 1,275, representing a 1,139 percent increase.

And while she clarified that she’s not an advocate for bitcoin or cryptocurrencies, she said she finds the work around the technology “really exciting.”

“It’s not that I’m supporting any one asset, it’s just that I’m supporting the ingenuity and the creativity and the curiosity that’s motivating people to invest their time and money in these new technologies,” she said. “I think that’s exciting. But again, I can’t weigh in on any particular asset, including bitcoin.”

But according to Peirce, the crypto-faithful who are following her shouldn’t expect too many fireworks.

She concluded:

“It’s that my guess is that most of those followers will find most of my tweets very boring. Most of them are about very dull regulatory things.”

Hester Peirce image via YouTube/Elizabeth Warren