Key Takeaways
- Hester Peirce states many meme coins likely fall outside the SEC’s regulatory jurisdiction.
- The SEC is shifting from using enforcement actions to setting clear regulatory policies.
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Hester Peirce, head of the SEC’s crypto task force, indicated that many meme coins likely fall outside the SEC’s current regulatory framework, which encompasses broad authority over the securities industry.
Speaking to Bloomberg Crypto on Thursday, Peirce said the SEC’s standard regulatory approach is to evaluate each meme coin on a case-by-case basis.
“Facts and circumstances matter. We always have to look at the facts and circumstances,” said Peirce, when asked whether she thought the President and First Lady launching their meme coins made her job more difficult.
“But many of the meme coins that are out there probably do not have a home in the SEC, under our set of regulations,” she stated, adding that Congress or the CFTC could clarify the regulatory landscape for meme coins if they want to.
“Many of those, I think, probably are not within our jurisdiction,” Peirce reiterated.
Call for innovation-friendly crypto regulation
Peirce acknowledged that the SEC, under previous leadership, had relied heavily on enforcement actions to establish regulatory policy, a practice she aims to change.
“We have been using enforcement cases to set regulatory policy. We’re trying to shift that,” she stated. “So we actually set policy and then we bring enforcement cases as needed.”
She added that the securities watchdog would need to “untangle” existing cases and review them individually.
Peirce, who described herself as a “freedom maximalist,” expressed frustration with the current regulatory environment for crypto, arguing that it has stifled innovation.
“The approach that we’ve been taking to crypto has been one of using regulation to stop people from trying to do interesting things they want to do,” she asserted.
Peirce believes the SEC should focus on creating “basic parameters” within which innovation can flourish.
“Regulation is designed to create some basic parameters and then let people have maximum freedom to innovate and try new things within that,” she explained.
While advocating for innovation, Peirce maintained the importance of investor protection.
“It doesn’t mean a free for all,” she said. “We have rules in place and those rules will be enforced.”
The Commissioner also discussed other key issues, including the SEC’s efforts to process applications for exempt relief, particularly for exchange-traded products (ETFs), and the agency’s willingness to work with crypto exchanges seeking registration.
According to her, the SEC is working with the CFTC on various issues, including derivatives policy, and is willing to continue that collaboration on crypto policy.
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