A U.S. Securities and Exchange Commission (SEC) commissioner named Hester Peirce recently spoke out against SEC Chairman Gary Gensler’s anti-crypto stance.
In a new speech, Peirce slams the regulatory body for proposing an adjustment to the definition of “exchange” to include decentralized finance (DeFi) protocols. In Peirce’s view, such a change would be counterproductive, serving only as a way to enforce centralization and stagnation. She indicated the following:
“Stagnation, centralization, displacement and extinction are the keywords of this release. Instead of embracing the promise of new technology, as we have in the past, we propose here to embrace stagnation, enforce centralization, encourage expatriation, and welcome the extinction of new technology. That’s why I don’t agree.”
Peirce said the SEC’s proposal could violate First Amendment protections by categorizing blockchain ecosystems as part of a “group,” creating ambiguity about their rights to speak. She continued with:
“The ambiguity of the release undermines the fundamental protections of the First Amendment. Because the release makes everyone involved in the relevant blockchain ecosystem part of a ‘group’, there will be significant ambiguity about what speech needs to be pre-approved by the government, which will inevitably chill constitutionally protected speech.”
The commissioner went on to say that the SEC should remain open to the idea that it will need to adapt its rules to new technologies, something she said she understood in the 1990s.
According to Peirce, the SEC’s latest release marks an era in which cutting-edge companies can be shut out for failing to comply with existing legal mandates. She concluded with:
“A Commission serious about regulating – not destroying – this market would think about this almost spotless record of regulatory failure and do something about it. We would consider the possibility that our rules, which have been developed historically to meet the needs and risks of investors and companies in the traditional securities markets, need some adjustments to allow companies to use innovative ways of financing use new technologies to be offered.
The Commission of the 1990s understood this basic principle and created space for major innovations in securities trading. In contrast, this release believes that any business model that cannot meet the specific requirements of our existing regulatory model has no place in our markets.”