SEC Commissioner Hester Peirce Advocates for Clearer Guidance on Digital Assets and Custody

SEC Commissioner Hester Peirce emphasized the need for the SEC to provide increased regulatory clarity with regard to Bitcoin exchange-traded products ("ETPs") and custodial services for digital assets.

In remarks at the British Blockchain Association Conference, titled "Success through Synergy: Next Generation Leadership for Extraordinary Times," Ms. Peirce said that the SEC's approach towards providing guidance regarding digital assets issues has been inconsistent with the SEC's role as a "disclosure regulator, rather than a more interventionist merit regulator."

Mr. Peirce underscored the SEC's lack of approval of any Bitcoin ETP, as an example of a rigorous regulatory approach that has moved away from disclosure regulation. She argued that the SEC has actively discouraged SEC-registered funds from investing in digital assets. Comparing the SEC's approach towards digital assets unfavorably with that of the CFTC and the OCC, Ms. Peirce observed that those regulators have enabled an active Bitcoin futures market to develop and permitted banks to use stablecoins for payment activities.

Ms. Peirce identified custody as an area that requires greater regulatory clarity, citing the SEC's response to Wyoming State's determination that a state-chartered trust company was a qualified custodian under the Investment Advisers Act. She also criticized the SEC for its failure to provide meaningful guidance as to when a digital asset is a "security."

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