Not All Crypto is Financial, Says an SEC Commissioner

U.S. Securities and Exchange Commissioner, Hester Peirce, often called "Crypto Mom," believes that U.S. cryptocurrency rules should not treat every use of the technology as financial. She shared her thoughts during a virtual talk at Australian Blockchain Week on June 29.

She said that a good regulatory framework should not assume that every aspect of crypto is a financial asset. While crypto is often thought of in financial terms, Peirce noted other uses such as allowing people to connect without needing a central authority. This can be useful not just in finance, but also in social media and other platforms.

Peirce feels regulations should be "reserved" but clear enough to encourage experimentation. She warned against an inflexible framework that could not adapt to new uses of crypto and blockchain. 

She also critiqued the SEC's current approach, saying it isn't good to be reserved and then suddenly enforce actions years later. She believes the SEC needs to rethink its approach to innovation, especially with regard to crypto. 

In response to the FTX's collapse and following allegations, Peirce advised the crypto industry to self-regulate and consider risks, conflicts of interest and leverage. She emphasized the need for industry self-regulation but acknowledged a role for government regulators.