Commissioner Hester Peirce of the US Securities and Exchange Commission (SEC) is speaking out against Chairman Gary Gensler’s anti-crypto agenda.
In a recent speech, Peirce criticizes the regulatory agency for proposing an adjustment to the definition of “exchange” to include decentralized finance (DeFi) protocols.
According to Peirce, such a change would be counterproductive and serve only as a way to force centralization and stagnation.
“Stagnation, centralization, expatriation and extinction are the key words for this release. Instead of embracing the promise of new technology as we have done in the past, we propose here to embrace stagnation, force centralization, encourage the expulsion and welcome extinction of new technology. That is why I disagree.”
Peirce says the SEC̵[ads1]7;s proposal could violate First Amendment protections by categorizing blockchain ecosystems as part of a “group,” creating ambiguity about their speech rights.
“The ambiguity of the release undermines basic First Amendment protections. Because the release makes everyone involved in the relevant blockchain ecosystem part of a ‘group’, it creates significant ambiguity about what speech requires prior government approval, which will inevitably chill constitutionally protected speech.”
The commissioner goes on to say the SEC should remain open to the idea that it needs to adjust its rules to adapt to new technologies, something she says it understood in the 1990s.
According to Peirce, the SEC’s latest release heralds an era where cutting-edge businesses can be barred because they can’t comply with existing regulatory mandates.
“A commission serious about regulating – and not destroying – this market would reflect on this almost spotless record of regulatory failure and do something about it. We will consider the possibility that our rules, which have recently evolved to meet the needs and risks presented by investors and firms in the traditional securities markets, may require some adaptations to allow firms to offer innovative ways of conducting finance. using new technologies.
The Commission in the 1990s understood this basic principle and created room for significant innovations in securities trading. This 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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