In a recent interview with CNBC, Securities and Exchange Commission (SEC) Commissioner Hester Peirce noted that the US has “dropped the ball” on cryptocurrency regulation.
The Commissioner is known for her support of the industry, which has earned her the nickname “crypto mom.” Peirce talked about the regulatory challenges in the crypto industry in the interview on the sidelines of the DC Blockchain Summit this week.
The SEC Commissioner talked about the worsening issue of fraud in the sector, stating: “There’s a lot of fraud in this space because it’s the hot area of the moment.”
That said, Peirce noted that one of her troubling concerns is that the SEC has dropped the ball on crypto regulation, stating: “The other piece that does concern me is the way that we’ve sort of dropped the regulatory ball.”
The commissioner warned: “We’re not allowing innovation to develop and experimentation to happen in a healthy way, and there are long-term consequences of that failure.”
The cryptocurrency market has come under more scrutiny following several weeks of debilitating losses. In May alone, the crypto market recorded the evaporation of about $500 billion.
The bearish sentiment in the market got worsened by the Terra meltdown, which led to the collapse of both its native token LUNA and its Stablecoin UST. This debacle prompted Congress to call for urgent regulation of Stablecoins.
SEC Chairman Cautions Against Investing in Crypto
After the Terra crash, SEC Chairman Gary Gensler took to the air to warn that “more crypto tokens will fail and investors will get hurt.” Gensler continues to argue that a vast majority of tokens listed on crypto exchanges are securities and should be registered and regulated by the agency.
However, Gensler also explained that his agency was “outpersonned” and lacked the adequate resources to effectively police the financial markets.
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