Hester Pierce Point Out Flaws in Gensler Regulatory Agenda
Last updated on October 31st, 2022 at 11:52 pm
Hester Pierce, a U.S. Securities and Exchange Commission (SEC) Commissioner, has called out the SEC chair, Gary Gensler, over his newly released regulatory agenda. Pierce noted that the agenda failed to include features that will boost investor protection and help companies raise capital.
Pierce, popularly known as the “Crypto Mom,” issued a joint statement on the matter on December 13th alongside SEC Commissioner Elad Roisman.
One of the contentious issues raised by the two commissioners was that Gensler’s Regulatory Flexibility Agenda failed to facilitate capital formation. They noted that the agenda neglected any feature to help companies raise capital. Instead, some of the items listed could inhibit capital formation.
The pair alluded that some of Gensler’s proposals would not only limit the opportunities of capital formation but also
“limit the opportunity of employees, smaller investors, and other non-institutional investors to invest in promising businesses.”
Moreover, Gensler’s agenda also fails to address the issue of investor protection because it fails to offer more clarity on digital assets. According to Pierce and Roisman, the agenda does not mention any regulations regarding digital assets.
“Rather than taking on the difficult task of formulating rules to allow investors and regulated entities to interact with digital assets, including digital asset securities, the Agenda – through its silence on crypto – signals that the market can expect continued questions around the application of our securities laws to this area of increasing investor interest. Such silence emboldens fraudsters and hinders conscientious participants who want to comply with the law.”
The duo also takes note of the failure of the agenda to prioritize data security that allows the collection and storage of trade-related information in the market and the identities of the persons behind these trades.
The two regulators expressed their concern over the deferment of these amendments, which could leave “investors’ data vulnerable.”
Gensler’s SEC Tenure
Gensler took over as the chief of the SEC in April this year. The largest part of his tenure has been marked with calls for regulatory clarity between tokens and securities.
When Gensler took over as the SEC Chief, the regulatory body was already deeply involved in a case with Ripple, with the commission stating XRP was a security.
Gensler has repeatedly called for crypto firms to come in and hold talks with the commission. He has also promised to introduce policy changes regarding various aspects in the crypto space, including decentralized finance, stablecoins, exchange-traded funds (ETFs) and lending programs.
The SEC has been blamed for the lack of a direct crypto ETF in the U.S. The SEC recently approved several Bitcoin futures ETFs and it has previously stated that futures-based ETFs offer better investor protection than direct Bitcoin ETFs.
The SEC has been blamed for the lack of a direct crypto ETF in the U.S. The SEC recently approved several Bitcoin futures ETFs and it has previously stated that futures-based ETFs offer better investor protection than direct Bitcoin ETFs.
Last week, crypto CEOs in the U.S. went to a congressional hearing, where Gensler was again accused of failing to offer regulatory clarity in the crypto sector. The CEOs stated that a lack of regulatory clarity could stifle innovations in the U.S. and move the crypto business overseas.
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