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Clear crypto rules urgently needed as major companies embrace asset - SEC official

By Chris Prentice and Katanga Johnson

WASHINGTON, Feb 13 (Reuters) - A clear cryptocurrencyregulatory regime is urgently needed as major companies likeTesla Inc, BNY Mellon Corp and Mastercard Incembrace the alternative asset class, a top Securities andExchange Commission (SEC) official said.

Hester Peirce, a Republican commissioner at the agency, alsotold Reuters in an interview that it was too soon to draw policyconclusions from a "Reddit Rally" in GameStop Corp andother stocks, but it was "wonderful" that a new generation ofinvestors was able to participate in the market.

Dubbed by crypto enthusiasts as the “Crypto Mom” due to hersupportive stance on the asset class, Peirce has long advocatedfor regulators to create clear rules that would allow cryptoassets to thrive without fear of breaking the law.

"It's not only that there have been calls for clarity forsome time and that a new administration brings the chance totake a fresh look, but it also is a moment where it seems othersin the marketplace are also taking a fresh look," she said.

Bitcoin hit record highs this month after electric car-makerTesla said it had invested $1.5 billion in the cryptocurrencyand BNY Mellon said it would help clients hold, transfer, andissue digital assets. Mastercard also said it would open up itsnetwork to some cryptocurrencies.

"That adds to the urgency of us taking some sort of actionin this area to provide more clarity," said Peirce.

The market was plunged into crisis last month when Redditusers trading on low-cost retail platforms banded together todrive up the prices of GameStop and other stocks, squeezinghedge funds that had bet against those shares.

The resulting volatility triggered massive margin calls from“clearing” houses that guarantee trades, prompting severalretail platforms to suspend buying in the affected securities.

The incident sparked outrage among lawmakers on both sidesof the aisle. Vlad Tenev, CEO of trading app Robinhood, KenGriffin, CEO of hedge fund Citadel LLC and others involved inthe saga will testify before Congress on Thursday.

The SEC is examining the "gamut" of issues including marketvolatility, the role of retail brokers, and how the post-trademarket functioned, said Peirce.

"To see new investors participating in the markets is a goodthing and of course we want them to be educated and skeptical,"she said, adding that a wide range of market participants couldactually help improve price formation.(Writing by Michelle PriceEditing by Alistair Bell)

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