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SEC Commissioner Hester Peirce Opposes Crypto Bailouts

SEC Commissioner Hester Peirce Opposes Crypto Bailouts

key takeaways

  • SEC Commissioner Hester Peirce commented on the ongoing bear market in an interview published by Forbes.
  • Peirce opposed the idea of ​​a bailout for cryptocurrency projects and implied that a bear market would ultimately be healthy for the industry.
  • It also warned that scammers may take advantage of investor frustration to commit fraud during turbulent markets.

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SEC Commissioner Hester Pearce has suggested in a Interview with Forbes That she would oppose bailouts for crypto projects, although she remains friendly to the space.

Pearce Condemns Crypto Bailouts

Following the collapse of TeraUSD and the decision to halt the withdrawal of Celsius, the market price declined heavily. Bitcoin is now priced at $20,800, its lowest since December 2020.

However, Hester Pearce suggests that the ongoing bear market will help build a strong foundation for the crypto industry. Pearce commented that the current moment is “not only for market participants to learn but … for regulators to learn as well.”

Although some companies may seek bailouts, Pearce suggested that bailouts are outside the purview of the Securities and Exchange Commission. Furthermore, she stated that she does not support bailouts for cryptocurrency companies.

He added that crypto “has no bailout mechanism” and that its absence is “one of the strengths of that market”, implying that the crypto market has some ability to self-regulate. She concluded: “We should really let these things play out.”

Pearce advised investors to be wary of any service promising high returns. In that case, investors “need to ask questions about the risks involved,” she said.

Beyond the topic of bailouts, Peirce said the SEC could get more suggestions on fraud under the current circumstances. He warned that fraudsters could take advantage of investor frustration caused by the bear market.

Pearce remains pro-cryptocurrency

Pearce has historically advocated moderate cryptocurrency regulations. He is responsible for the SEC’s Safe Harbor proposal, which would allow new crypto projects to develop rapidly.

In this week’s Forbes interview, Pearce expressed positive sentiment towards the Responsible Financial Innovation Act—a bipartisan bill that would set clear rules for the crypto industry. It was unveiled earlier this month by Senators Cynthia Loomis (R-WY) and Kirsten Gillibrand (D-NY).

Pearce also commented in favor of bitcoin ETFs in a speech. Last week, The SEC has rejected all spot bitcoin ETFs to date. In his statement, Peirce urged the regulator to “stop refusing to explicitly spot crypto exchange-traded products.”

Commissioner Pierce has served as the SEC’s most pro-cryptocurrency regulator since early 2018. He is likely to step down when his term ends in 2025.

Disclosure: At the time of writing, the author of this article owns BTC, ETH and other cryptocurrencies.

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