SEC Forms New Crypto Task Force Spearheaded by Hester Peirce

SEC Forms New Crypto Task Force Spearheaded by Hester Peirce

In a Tuesday announcement, the U.S. Securities and Exchange Commission (SEC) acknowledged that it “can do better” in its approach to regulating cryptocurrency.

Following Gary Gensler's official departure as SEC Chairman, the agency’s stance on crypto is undergoing a significant overhaul. Acting Chair Mark Uyeda revealed the formation of a new crypto task force designed to “develop a comprehensive and clear regulatory framework for crypto assets.” This task force will be led by Commissioner Hester Peirce, a well-known advocate for the crypto industry, and will closely collaborate with industry stakeholders to shape the regulations. The task force will also offer “technical assistance” to Congress as it works on crypto legislation.

The announcement marks a notable shift in the SEC’s approach to cryptocurrency regulation, signaling a departure from its previous strategy. The statement emphasized that the SEC had relied largely on enforcement actions to address crypto, often applying new and untested legal interpretations. This has led to confusion over registration requirements and legal standards, creating an environment that is both discouraging to innovation and conducive to fraud. The SEC admitted that it can improve in this area.

The new task force will also collaborate with the Commodity Futures Trading Commission (CFTC), which, under former Chairs Gensler and Rostin Behnam, had been in competition with the SEC over which agency should regulate the crypto space.

In her statement, Commissioner Peirce emphasized that the success of the task force would depend on contributions from a broad spectrum of investors, industry participants, academics, and other stakeholders. She expressed optimism about working together to create a regulatory environment that protects investors, encourages capital formation, maintains market integrity, and fosters innovation.

The SEC had previously issued staff guidance on crypto regulation in 2019, though it has received little attention or discussion in the years since.