Business & Finance

SEC Commissioner Hailed as a Hero by the Crypto Community

Hester Peirce, a commissioner at the United States Securities and Exchange Commission (SEC), becomes the center of attraction for the followers of the crypto world after showing her dissent regarding SEC’s decision of rejecting the proposal for the establishment of a bitcoin exchange traded-fund (ETF) last week.

In a recent interview, Hester stated that the regulating committees like the SEC’s should not be standing in the way of technological advancements of the modern world, such as cryptocurrency. She told that the SEC should not control which innovation will get through. By stopping the investors from entering such a big and global market, the SEC is not fulfilling its incumbent duties of providing the investors in the country enough opportunities to grow. She stated;

From my perspective, we need to be mindful of what our role is, and it’s not to be the ones who decide which innovations and which technologies get through and which ones don’t. I think that’s a very dangerous position to put ourselves in, and I think it really does harm investors because it denies them opportunity.

Hester is very clear regarding her stance on the policies being applied by the SEC. She believes that as long as the investors know about the framework, it is up to them to decide if they want to invest in something or not. Instead of protecting them, the SEC might prove to be an obstacle in the way of growth for the investors. In her dissent letter to the SEC, she stated that:

The Commission’s mission historically has been, and should continue to be, to ensure that investors have the information they need to make intelligent investment decisions and that the rules of the exchange are designed to provide transparency and prevent manipulation as market participants interact with each other. The Commission steps beyond this limited role when it focuses instead on the quality and characteristics of the markets underlying a product that an exchange seeks to list.

Regarding her current position of advocating the establishment of a bitcoin ETF, she stated that it doesn’t matter if the bitcoin fails or succeeds, her position is solely in the favor of the technological advancements that it presents as a whole. She told that:

I’m not taking a view whether bitcoin is going to succeed or fail. I’m excited by the fact that people are thinking of new ways to do things. Bitcoin is one of those things, blockchain is one of those things, other cryptocurrencies – but again I’m not weighing on any particular innovation or any particular asset.

According to Hester, the proposal put forward by the Winklevoss twins, backed by Bats BZX with proposed rule changes, was good enough to be passed this time around. The rule change proposed by Bats BZX, handled most of the concerns put forward by the SEC in the initial rejection of the past year.

SEC’s main contention regarding the establishment of a bitcoin ETF, have been the use of the platform for carrying out illegal and manipulative activities. It was stated by the SEC:

Although the Commission is disapproving this proposed rule change, the Commission emphasizes that its disapproval does not rest on an evaluation of whether bitcoin or blockchain technology more generally has utility or value as an innovation or an investment. Rather, the Commission is disapproving this proposed rule change because as discussed in detail below, BZX has not met its burden under the Exchange Act and the Commission’s Rules of Practice to demonstrate that its proposal is consistent with the requirements of the Exchange Act Section 6(b)(5), in particular the requirement that its rules be designed to prevent fraudulent and manipulative acts and practices.

Hester seemed to project the view, that as long as the investors entering the market know the underlying service at work, and the nature of the project they are investing into, they should not be stopped. In the interview, she stated that:

If someone is trying to raise money for a legitimate project, as long as the person explains what he’s trying to do and what he’s going to do with the money that reveals everything material that investors need to know – I don’t think we should stand in the way.

In her official dissent letter, Hester expressed that:

If we were to approve the ETP at issue here, investors could choose whether to buy it or avoid it. The Commission’s action today deprives investors of this choice. I reject the role of gatekeeper of innovation—a role very different from (and, indeed, inconsistent with) our mission of protecting investors, fostering capital formation, and facilitating fair, orderly, and efficient markets. Accordingly, I dissent.

Although Hester has been supporting the crypto-linked ETF, she later on clarified that she is not becoming an advocate for any particular cryptocurrency asset, like Bitcoin. Instead, she is supporting the entire technology behind it as a whole. Technological advancements should not be jammed by the regulatory bodies on a larger scale. She stated that:

It’s not that I’m supporting any one asset, it’s just that I’m supporting the ingenuity and the creativity and the curiosity that’s motivating people to invest their time and money in these new technologies. I think that’s exciting. But again, I can’t weigh in on any particular asset, including bitcoin.

As a result of the support shown by Hester, the Twitter fanatics of the cryptocurrency world have started following her on large scale. She stated that people should not consider her a champion in this regards as she is just supporting the technology, not any particular cryptocurrency asset. She also warned her followers from following her on twitter by stating that most of her tweets are boring and dull.

It’s that my guess is that most of those followers will find most of my tweets very boring. Most of them are about very dull regulatory things.

In a nutshell, the hailing of Hester Peirce as a champion of the crypto world by the followers of this space, after dissenting over the SEC’s decision of rejecting a bitcoin ETF, shows the increasing intensity in the demands and dire need for a crypto-linked ETF right now.

Ahsan Khalid

Blockchain Developer. An Electrical Engineer with majors in software development. I present forward my insight regarding the latest happenings of the blockchain world. All views on my articles are my own. Email: ahsan@blockpublisher.com or editor.news@blockpublisher.com

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