SEC Commissioner Hester M. Peirce.
U.S. Securities and Exchange Commissioner Hester Peirce invited the audience to talk to her directly at the Blockland Solutions event in Cleveland, Ohio. She also explained how she got the nickname “crypto mom.” (You can learn more by clicking on the video below.)
But those weren’t the best parts. The main attraction of our Dec. 9 fireside chat were her thoughts on the challenges of regulatory compliance in a time of rapid innovation.
“Policy doesn’t change from administration to administration,” said Peirce, who fondly recalled her hometown roots, as a 1993 graduate of Case Western Reserve University, where I am an assistant professor at the School of Law.
“As a regulator, we need to learn from—and adapt to—new technology,” she added.
Financial regulations, written in the era of the steam engine, are colliding with innovative and cutting-edge financial technology. Regulatory compliance presents unique risks and uncertainties for financial institutions engaged in blockchain and cryptocurrency innovation.
Those challenges include the potential risks that crypto assets pose to investor protection and market integrity. There is tension between rapid innovation on the one hand and the need for investor protection on the other.
We discussed how institutions—both legacy and new—are tackling these challenges and how the SEC can help shape policy, guide innovators and entrepreneurs, and promote a culture of compliance throughout blockchain and crypto.
There are those who are currently pushing Congress and the SEC to change the accredited investor definitions to allow retail investors to get involved in innovative markets. She thinks it’s a good idea, I think we should talk more about it.
We also need to take a look at increasing provisions for safe harbors for the offer and sale of tokens, regulations that will protect against legal liabilities—if certain conditions are met.
We’re both concerned about many innovations in this space are happening outside the U.S., where companies and their founders are concerned about regulations.
“It’s not that I don’t want to see development in other places in the world,” she said. ”But what I hate hearing is ‘Hester, we really would love to do this in the U.S. and we’re not because of a lack of regularly clarity.”
If you’d like to learn more, have an interesting story to share, or would like to know what I like best about Cleveland, send me an email at Anat.Beck@case.edu. I, too, have an open-door policy.
