- Hester Peirce, SEC Commissioner, shared a tweet in which she shared her thoughts on crypto.
- She highlighted major happenings of the crypto market in the last year.
On January 20th, 2023, Hester Peirce, SEC Commissioner, shared her thoughts on crypto. In her recent tweet she added “we need to approach crypto regulation carefully in 2023, but people in crypto should not wait for regulators to solve problems that manifested during 2022.”
Hester Peirce said at the Duke conference that “the first and most important lesson for people who believe in crypto’s future is that they should not wait for regulators to fix the problems that bubbled to the surface in 2022.”
Peirce noted in her speech that “Digital assets need to trade, so centralized venues or decentralized exchange protocols are necessary, but trading markets are not the ultimate point. Nor is the point of crypto to lend your crypto assets so that other people can trade them, although lending markets, in which everyone is aware of the risks, are not inherently problematic.”
Each crypto asset, blockchain, and projects needs to be assessed on its own merits, Peirce further added. “If crypto is a monolith obscures important differences and makes it easier for scammers to hide in the crowd.”
Peirce added about the problems in the design of a protocol or at a centralized infrastructure provider that can have sweeping, disastrous consequences. However, testing protocols and careful analysis of the incentives can prevent problems from arising after the protocol or infrastructure has been widely adopted.
Although crypto enables reduced reliance on centralized intermediaries, as long as companies are actively involved in crypto, people should take the same precautions as they would when dealing with any other company. For their part, crypto companies should take the steps necessary to earn and keep their customers’ and counterparties’ trust, as Peirce noted.
Furthermore, the SEC commissioner noted the importance of recognizing and protecting against counterparty risk, many other lessons from traditional finance are equally applicable in crypto. The SEC needs to conduct better, more precise, and more transparent legal analysis. Peirce then concluded by saying “Last year was so brutal for crypto that some people want to relegate it to the dustbin of failed experiments. Rather than swiping left on crypto, we should remember that new technologies sometimes take a long time to find their footing.”
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.