SEC Commissioner Hester Peirce has voiced her concern about the U.S. Securities and Exchange Commission not providing the crypto industry with clear guidance fast enough. Peirce spoke at the Securities Enforcement Forum on May 9. Peirce worries that the SEC's "unwillingness to take meaningful action at all” will hinder the development of the crypto space.
Peirce admits any regulator’s restraint when imposing new regulations is appropriate. However, she points out that new emerging industries still need to comply with securities law, and there are areas where the regulations lack clarity. She criticized the framework issued by the SEC to assist with Howey test analysis. The framework should help issuers decide whether a token is a security under securities law but according to Peirce, the 14-page document is too complex for those without specialist knowledge of the securities law. Therefore, instead of providing guidance, the framework makes the law even more of a “perilous business.”
“Our Jackson Pollock approach to splashing lots of factors on the canvas without any clear message leaves something to be desired, so we still have work to do in clarifying what factors are the most important in making that determination,” she said.
Peirce explained it is not the SEC's role to guide innovation and that "we also should recognize that we cannot stop it and embrace the potential for positive change that innovation offers. Our silence is likely to simply push this innovation and any attendant economic growth into other jurisdictions that have done their work and provided clear guidelines for the market participants to follow."