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A commissioner with the U.S. Securities and Exchange Commission (SEC) has warned that the securities market regulator has dropped the ball on crypto regulation. \u201cWe\u2019re not allowing innovation to develop and experimentation to happen in a healthy way, and there are long-term consequences of that failure,\u201d said the commissioner.<\/strong>\n<\/p>\n \n Peirce, who is also known in the crypto community as \u201ccrypto mom\u201d for her support of the industry, discussed challenges in the crypto ecosystem from a regulatory standpoint. Firstly, the commissioner mentioned fraud, stating that \u201cThere\u2019s a lot of fraud in this space because it\u2019s the hot area of the moment.\u201d<\/p>\n However, she stressed that what concerns her more is that the SEC has dropped the ball on crypto regulation. Peirce stated:\n<\/p>\n The other piece that does concern me is the way that we\u2019ve sort of dropped the regulatory ball.<\/p>\n<\/blockquote>\n \n The crypto market has suffered a massive loss over the recent weeks, shedding about $500 billion since the beginning of the month.<\/p>\n The market downturn was exacerbated by the collapse of cryptocurrency terra (LUNA) and algorithmic stablecoin terrausd (UST). The two cryptocurrencies lost almost all value within days. The catastrophe has prompted Congress to call for the urgent regulation<\/a> of stablecoins.<\/p>\n Following the implosion of the two cryptocurrencies, SEC Chairman Gary Gensler warned that a lot of crypto tokens will fail<\/a> and investors will get hurt. He has repeatedly said that a lot of coins listed on crypto exchanges are securities and should be registered with his agency. However, Gensler also emphasized that the SEC does not have enough resources to adequately police financial markets, stating that the regulator is really \u201coutpersonned.\u201d He also said that crypto exchanges are trading against their customers often<\/a>.<\/p>\n The SEC under Gensler has so far been enforcement-centric<\/a>. Since the securities watchdog launched a unit dedicated to crypto asset oversight in 2017, it has brought more than 80 enforcement actions against crypto companies. The agency recently announced that it will almost double the size<\/a> of its Enforcement Division\u2019s crypto unit.<\/p>\n Peirce emphasized the need for regulatory clarity from the SEC, adding that there is a lot of work to be done within existing authorities. Citing that traditional financial institutions want to get involved in crypto, she stressed: \u201cThey need regulatory clarity from us in order to do that.\u201d<\/p>\n The commissioner opined:\n<\/p>\n We can go after fraud and we can play a more positive role on the innovation side, but we have to get to it, we\u2019ve got to get working \u2026 I haven\u2019t seen us willing to do that work so far.<\/p>\n<\/blockquote>\nSEC Commissioner Warns About the \u2018Failure\u2019 of Crypto Regulation<\/h2>\n
\nSEC Commissioner Hester Peirce expressed concerns that the U.S. has dropped the ball on the regulation of cryptocurrencies in an interview with CNBC on the sidelines of the DC Blockchain Summit this week.<\/p>\n\n
\n\u201cWe\u2019re not allowing innovation to develop and experimentation to happen in a healthy way, and there are long-term consequences of that failure,\u201d the commissioner warned.<\/p>\n\n