In a bold move to streamline cryptocurrency regulations, SEC Commissioner Hester M. Peirce has proposed a seven-point framework urging Congress to cut red tape, empower existing agencies, and protect peer-to-peer crypto transactions. Speaking at the Digital Chamber’s 8th Annual DC Blockchain Summit on March 26, Peirce emphasized the need for a clear and efficient regulatory structure to support the growing crypto industry.
The Seven-Point Crypto Reform Plan
Peirce, who leads the newly established Crypto Task Force at the SEC, identified key inefficiencies in the current regulatory landscape, arguing that overlapping mandates between the SEC, Commodity Futures Trading Commission (CFTC), Financial Crimes Enforcement Network (FinCEN), and state regulators create unnecessary complexity. To address these issues, she outlined the following recommendations:
1. Empower Existing Agencies: Rather than creating a new regulatory body, Congress should strengthen the capabilities of current agencies.
2. Limit Scope to U.S.-Based Platforms: Regulations should focus on domestic or U.S.-targeted crypto entities to avoid overreach.
3. Federal Preemption for Interstate Commerce: Simplify compliance by overriding conflicting state laws.
4. Assign Specific Crypto Asset Oversight: Designate federal agencies to regulate different crypto asset types to reduce ambiguity.
5. Allow Broader Crypto Asset Trading: Enable trading of non-security crypto assets under SEC or CFTC oversight.
6. Apply Traditional Financial Principles: Require crypto trading platforms to function similarly to Alternative Trading Systems (ATS).
7. Protect Peer-to-Peer Transactions: Ensure individuals retain the right to transact directly without excessive regulation.
Balancing Innovation and Protection
Peirce stressed the importance of regulatory clarity while maintaining investor protections. Her plan seeks to provide a solid framework for regulatory oversight, including enforcement actions against fraud, insider trading, and violations of customer protection rules.
With Congress under growing pressure to act, Peirce’s proposals offer a pragmatic approach to balancing innovation with financial safeguards. As lawmakers debate the future of crypto regulation, her framework could serve as a foundation for much-needed reform.
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