The U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce has stated that cryptocurrencies themselves are not securities.
This admission from Peirce was during a hearing with the SEC, which was held on September 24. It was the first time since 2019 when all five SEC commissioners testified before the committee.
“Based on recent actions taken by Chairman Gensler, it’s easy to forget that the SEC is independent and led by a bipartisan commission,” Chairman McHenry said during his opening remarks.
SEC’s crypto stance criticized
Peirce is known for being vocal in her stance on crypto and criticized the agency’s approach to cryptocurrency regulation. She pointed out that the SEC has been intentionally ambiguous in its language, which has led to confusion in the industry.
“I think what’s happening is that we’re trying to be ambiguous because the legal precision carries with it real implications,” Peirce stated. She highlighted the need for clarity that many in the crypto space have been demanding.
The commissioner emphasized the importance of distinguishing between the cryptocurrency token itself and any associated investment contract. She raised critical questions about the nature and duration of these contracts:
“Is the token itself a security? Or is it part of an investment contract? Is it being sold together with an investment contract?
Peirce stated cryptocurrencies are not securities
Peirce admitted that tokens themselves are not securities. This could potentially ease regulatory burdens on crypto projects and exchanges.
The commissioner also spoke about the SEC’s failure to provide clear guidance, stating, “We’ve fallen down on our duty as a regulator not to be precise.”
She argued that the agency should have made this distinction clear long ago and begun addressing the more complex questions surrounding cryptocurrency regulation.
Peirce added that actually the token itself is not a security and mentioned that it is something that they should have admitted long ago. The statement goes against the SEC’s identification of several cryptocurrencies as securities.
Additional reporting by Noor Bazmi
