Exclusive interview with "Crypto Mom" Hester Peirce: How do you view the future regulatory direction of the SEC?

Original title: ETHEREUM ETFS POTENTIALLY ABLE TO STAKE IN THE FUTURE: SEC'S PEIRCE

Original author: Zack Guzman, Coinage
Original translation: Wu said blockchain

In an interview with Zack Guzman of Coinage, Hester Peirce, Commissioner of the U.S. Securities and Exchange Commission, shared her views on cryptocurrency regulation, the Bitcoin ETF approval process, market futures, and future regulatory directions. She also discussed the impact of SAB-121 and Congress' efforts to define securities and commodities. Peirce emphasized the importance of industry self-regulation and the role of the government, and expressed optimism about future changes in regulatory culture.

Original article: https://www.coinage.media/s3/ethereum-etfs-potentially-able-to-stake-in-the-future-secs-peirce

Ethereum ETF approved without a committee vote, what is the actual situation behind it?

Peirce:The absence of a committee vote is not that unusual. A lot of these ETP approvals are done at the delegation level, meaning we delegate authority to staff and staff can approve them without a formal committee vote. But I don't think that's surprising because we have a bitcoin exchange-traded product. The court told us we had to basically move forward, and that's what happened. And then applying the same logic, we really didn't have much choice in getting approval for these ETPs.

What is the difference between a bitcoin ETF and an ethereum ETF?

Peirce:I think the Bitcoin ETF is really unusual because after years of buildup and so many different people trying to get approval, they're all going to go live, and everyone knows they're going to go live at the same time, and there's so much anticipation around it. While there was anticipation around the ETH ETF, what we saw was an iterative process, they got approved in terms of trading and markets, and then they still had to go through the corporate finance process, which is what's happening now. So I think the atmosphere around the ETH ETF is much calmer. I think that's the main difference. Really, we shouldn't be looking to create drama when these products are launched, it should be that they go live and then we see if people are willing to buy, and that's how it should work.

Staking was removed from the application early on, why, and is there any possibility of change?

Peirce:I don't comment on what happened between the staff and the issuer in terms of staking being removed from the application. But I think that products with certain features, such as staking or other features, can always be reconsidered.

Does the Solana ETF application require a futures market in order to be approved?

Peirce:I'm a little hesitant to comment on these applications because they are in front of us. I can't comment on them. What I can say is that we have to look at the facts and the circumstances. What people need to do is they need to draw on previous ETP precedents, not just crypto ETPs, but other kinds of ETPs, and make a case that they can be approved under existing laws and rules. So we have to look at it on a case-by-case basis.

I think people need to look at whether there are other types of markets or products that don't have futures markets as an underpinning, and then they can make a case based on that.

Should SAB-121 be repealed, and what would be the impact on cryptocurrency custody?

Peirce:I think the process by which SAB 121 was issued was terrible. To me, it actually looks like a rulemaking that could have been done with public comment, and maybe it was up to the FASB to consider this issue instead of us. But regardless, we should have had a public comment period, and we didn't. The attempt to overturn it was unsuccessful. But before the attempt to overturn it, the scope of SAB 121 had been expanded. Initially it was primarily for public companies, and then it started to apply to broker-dealers. It had a lot of verbal guidance about what broker-dealers could and couldn't do. Now we're hearing that there are other kinds of adjustments or changes, and it's all being done in a very opaque way. I don't understand how that's good for people. We should follow the process. I am very disappointed with SAB 121, and I think we can do better and should do better.

One of the reasons I have always opposed SAB 121 is that it takes the position that we don't want experienced participants to custody cryptocurrencies, which to me is a very strange and investor protection-detrimental position. So I welcome more people to come in and participate in the development of the custody space. But it should be done in an orderly manner. I think it is a positive development to have participants with experience in other fields involved in crypto. Unfortunately, whether it is at the SEC or elsewhere in the government, the government often tries to expel participants who are interested in participating but are not welcome. So this is indeed a potentially positive development. I hope to see more participants enter the custody and crypto space.

FIT-21 determined that Congress can draw the line around cryptocurrencies. Are you proud or concerned about the regulatory direction you're seeing so far?

Peirce: I think it's great that Congress is taking the time to think about these very difficult questions (drawing the line between what cryptocurrencies are and aren't allowed in the U.S.) that we could have taken a more proactive stance on in the regulatory space, and that Congress is trying to provide some guidance. I think that's a positive step for the U.S. to have real conversations around these issues and try to find the right solutions.

But I think we're still not in a great position in terms of regulation because we're still driving policy through enforcement, and that's not the way policy should be driven. It should be about thinking about a regulatory framework and then starting there, and then using enforcement to deal with fraud.

Another area that I've been pushing hard is around cross-border payments and the global stablecoin space around tokenization on the blockchain. I think the U.S. may not be at the forefront of that path, and it's a good example for us to see how other countries are trying to build an environment for people to experiment with these things. I still think we can do that with some rules or a sandbox experimentation framework. Because the rest of the world is doing that. I don't want us to fall behind. I think we have a strong capability in the U.S. to try these experiments, so I hope we can do that at some point.

Has the culture changed within the SEC? Are you optimistic about the future direction of regulation?

Peirce:Cultural change requires some positive steps, working with people and providing guidance. I am optimistic about future regulatory cultural changes because I see people looking for positive ways to interact with the industry. Ensuring the vitality of the industry is very important to us and it is one of my priorities.

If you become the chairman of the SEC, what would be your highest priority?

Peirce:Ensuring the vitality of the industry, allowing investors to make their own decisions, and ensuring that we do not put unnecessary obstacles in the way of rulemaking.

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