Commissioner Hester Peirce of the US Securities and Exchange Commission (SEC) is speaking out against Chairman Gary Gensler’s anti-crypto agenda.
In a new speech, Peirce slams the regulator for proposing to adjust the definition of “exchange” to include decentralized finance (DeFi) protocols.
According to Peirce, such a change would be counterproductive and only serve to force centralization and stagnation.
“Stagnation, centralization, expatriation, and extinction are the watchwords of this publication. Instead of embracing the promise of new technology, as we have done in the past, we propose here embracing stagnation, enforcing centralization, demanding expatriation, and embracing the extinction of new technology. Accordingly, I disagree.”
Peirce says the SEC’s proposal could violate First Amendment protections by categorizing blockchain ecosystems as part of a “group,” creating ambiguity about their speaking rights.
“The ambiguity of the publication undermines the fundamental protections of the First Amendment. Because the release makes all stakeholders in the relevant blockchain ecosystem part of a “group,” it creates significant ambiguity as to which speech requires prior government approval, which will inevitably chill constitutionally protected speech.”
The commissioner goes on to say that the SEC should remain open to the idea that it needs to adapt its rules to accommodate new technology, something she says she understood in the 1990s.
According to Peirce, the SEC’s latest disclosure heralds an era where cutting-edge companies may be locked out for failing to meet existing regulatory requirements.
“A commission that is serious about regulating – not destroying – this market would reflect on this near-pristine record of regulatory failure and do something about it. We would consider the possibility that our rules, which have evolved historically to meet the needs and risks of investors and companies in traditional securities markets, may require some adjustments to allow companies to offer innovative avenues of financing with new technologies.
The Commission of the 1990s understood this rationale and made room for significant innovation in securities trading. This press release, on the other hand, takes the view that any business model that cannot meet the specific requirements of our existing regulatory model does not belong in our markets.”
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