“The SEC will fundamentally change its approach to enforcement with the change in staffing, according to Commissioner Hester Pearce. “I hope we get back to understanding that we’re a regulatory agency within the executive branch of government, not an executive agency that doesn’t do regulation,” Pearce said at the Blockchain Association Summit. According to her, the Commission has “always gravitated towards enforcement” of the crypto industry, but with the change in the composition of the agency, that approach will change. After the departure of the current chairman […]”, — write: businessua.com.ua
SEC will fundamentally change the approach to law enforcement with a change in staffing, according to Commissioner Hester Pearce.
“I hope we will return to the understanding that we are a regulatory agency within the executive branch of government, not an executive agency that does not engage in regulation,” Pearce said at the Blockchain Association Summit.
According to her, the Commission has “always gravitated towards enforcement” of the crypto industry, but with the change in the composition of the agency, that approach will change.
With the departure of current SEC Chairman Gary Gensler, Pierce wants to focus on clearly defining the agency’s jurisdiction. Within its framework, market participants need to “help find a way forward” that will preserve the commercial attractiveness of the business, subject to compliance with the law.
“We have the flexibility to make adjustments through regulatory exceptions, waiver letters and other methods. […] I think there will be much more experiments in this space,” the commissioner added.
Her colleague, Commissioner Mark Ueda, who characterized the SEC’s previous approach as a “total disaster,” sees the changes as an opportunity to accomplish the Commission’s mission.
“There’s a reason we’re in the business of regulation, not pure enforcement,” he noted.
According to the commissioner, a responsible regulator should provide space for innovation, clearly communicate the rules and explain how to comply with them.
He hopes that the SEC will stop being the “swearing teacher” that bans everything and return to its proposed role as a regulator.
Ueda emphasized that in the court proceedings initiated by the Commission, only the employees of the department and representatives of the defendants participate, and the public knows nothing about it. In his opinion, issues of legislation can concern a much wider range of people who should join the discussion.
“That’s why we have the Administrative Procedures Act — to allow the public to comment on regulation. It is our responsibility to the American public to ensure this transparency,” Ueda said.
He added that even the commissioners themselves sometimes do not have a say in the affairs of the Commission, because experts responsible for law enforcement make ready-made recommendations without sufficient discussion.
Both commissioners agreed that coercive measures may be appropriate in some borderline cases, but are not entirely appropriate as a tool for creating large-scale regulations.
They also noted that in early 2025, the Commission will operate with a limited number of members until the Senate approves new appointments. With the dismissal of Gensler and Democratic Commissioner Jaime Lisarragh, Republicans Pierce and Ueda will remain at the head of the Commission, as well as Paul Atkins, who was nominated for the position of the head of the department.
“Because the three commissioners are from the same party, I think Democrats expect that once the Senate confirms Paul Atkins’ nomination, he will appoint someone from another political party relatively quickly,” said former SEC litigation lawyer Theresa Goody Guillen.
According to the rules, more than three members of the Commission cannot be from the same political party. Atkins will be able to nominate a Democrat, a Libertarian or an independent, but not another Republican.
It will be recalled that in December, a group of American organizations called on the Senate to approve SEC Commissioner Caroline Crenshaw, who represents the Democratic Party, for the next term.
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