SEC Commissioner Hester Peirce expresses displeasure at Crypto bailouts

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Key Takeaways

  • Peirce states that the current nature of the market provides opportunities for market participants and regulators to learn.
  • She noted that the lack of a bailout mechanism in crypto is one of its biggest strengths.
  • Recently, the SEC Commissioner offered her support to spot Bitcoin ETF’s and bashed SEC for regulatory ambiguity. 

United States Securities and Exchange Commission (SEC) commissioner Hester Peirce has expressed discontentment at crypto company bailouts. According to Pierce, crypto “does not have a bailout mechanism,” and the absence of that is“one of the strengths of that marketplace,” indicating the crypto market has some ability to self-regulate. She was talking in an interview with Forbes. She further added that they “really need to let these things play out.”

Peirce stated that the current market turmoil is separating strong companies from the weak. Commenting on the current market conditions, she stated that the present moment provides opportunities for market participants regulators to learn.”

Peirce, one of SEC’s most pro-crypto commisioner, further added that the ongoing bear market would help build a stronger foundation for the crypto industry. She also suggested that though some companies may seek bailouts they come outside the purview of the Securities and Exchange Commission’s authority. 

During the interview, the SEC Commissioner did not shy away from offering a piece of advice to crypto investors and traders. Pierce urged investors to be wary of any service that promises high returns and wanted investors to asking questions about its associated risks. The commissioner stressed that she did not support bailouts for anyone in the crypto market, particularly those that mismanaged risk and became over-leveraged. Peirce further added that the SEC may receive more tips on fraud under the current conditions.

She also warned that scammers may take advantage of investor desperation resulting from the bear market. The present crypto market is bearish with prices of Bitcoin, Ethereum along with other cryptocurrencies falling. The price of Bitcoin is at present $20,800, its lowest since December 2020. Lending platform Celsius Network and crypto-focused hedge fund Three Arrows Capital are now on the brink of insolvency owing to volatile market conditions 

Pierce is one among the very few SEC Commissioners who has remained Procrypto all throughout the market’s various phases. She is primarily responsible for the SEC’s Safe Harbor proposal, which would allow new crypto projects to develop quickly.

Peirce is also an advocate for the Responsible Financial Innovation Act—a  bipartisan bill that would set out clear rules for the crypto industry. It was announced this month by US Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY). She has earlier also voiced her opposition to the addition of 20 new jobs on the regulatory agency’s crypto enforcement squad.

Recently she offered her support to spot Bitcoin ETFs and also bashed SEC for regulatory ambiguity regarding the Spot Bitcoins. Peirce has urged SEC to stop denying categorically spot crypto exchange-traded products. She will likely step down from the SEC Commissioner position when her term ends in 2025.

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Saniya Raahath
Saniya Raahath

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