SEC’s Hester Peirce gives advice to crypto industry as frustration with agency grows 

Share This Post

US Securities and Exchange Commission Commissioner Hester Peirce is once again taking a critical stance against how her colleagues communicate with and enforce actors in the digital asset space.  

In a speech given at the Practising Law Institute’s SEC Speaks event Tuesday, Peirce called out the controversial Staff Accounting Bill 121, introduced in March 2022, calling it “a particularly pernicious weed.”

SAB 121, which under securities law is not an official rule, states that crypto custodians should report a liability and “corresponding assets” on their balance sheets. 

Read more: SEC staff call for crypto entities to show liability on balance sheet

“The Commission has not published that framework or any subsequent staff efforts to clarify the framework’s scope, but many auditors and broker-dealers are treating it as binding,” Peirce said. “It is driving broker-dealers to allocate significant capital to their crypto custody businesses or to avoid the business altogether.”

SAB 121 is intended to guard against the “significant risks and uncertainties associated with safeguarding crypto assets,” SEC staff said at the time.  

Congress has also taken note of the guidance. Earlier this year, the Government Accountability Office (GAO) found that the SEC had failed to follow the Congressional Review Act (CRA) when it issued SAB 121. The SEC later countered that SABs are not subject to follow CRA since they are not official rules. 

Sen. Cynthia Lummis, R-Wyo., and Reps. Mike Flood, R-Neb., and Wiley Nickel, D-N.C., issued a joint resolution in February to repeal the SEC’s Staff Accounting Bill (SAB) 121. 

Read more: Bipartisan Congressional group tries to repeal controversial SEC crypto custody policy 

Peirce on Tuesday also offered advice to market participants, who she said are growing increasingly frustrated with the “‘secret garden’ — the maze of staff guidance that serves to define practices across the securities industry in a way that may be inconsistent with a plain reading of the rulebook.” 

“Countless people have told me that they used to feel comfortable coming in and speaking with the Commission and its staff, but no more,” Peirce added. 

Read more: Crypto, it’s time to demand clarity from the courts

Those looking to “nudge the SEC in the right direction” should continue to engage with the Commission, Peirce said, recommending that businesses and company leaders keep a record of all SEC meetings, come prepared with an agenda and supporting materials and coordinate messages with others across the industry, when possible. 

“Do not be a stranger and do not give up,” Peirce said. “Carefully consider what the staff is saying. If you do not see a strong legal justification for stopping your idea, do not give up.”


Don’t miss the next big story – join our free daily newsletter.

Source
SEC’s Hester Peirce gives advice to crypto industry as frustration with agency grows  is written by Casey Wagner for blockworks.co

Related Posts

Genesis Trading-labelled address moves $720M BTC to Coinbase, pointing to the start of asset liquidations

A cryptocurrency wallet related to Genesis Trading has transferred...

Istanbul Blockchain Week Partners with Fortune Magazine Türkiye

What is Istanbul Blockchain Week?Istanbul Blockchain Week is an...

Helium eyes energy sector with ‘virtual power plant’ network

Last week, the Helium Foundation said in a somewhat-cryptic...

Crypto adoption in Argentina soars amid 276% inflation spike

Cryptocurrency adoption in Argentina has been setting records in...

Tomarket Launches Innovative Telegram Drop Game

The official version of the Tomarket Drop Game is...
ethereum
Ethereum (ETH) $ 3,257.01
bitcoin
Bitcoin (BTC) $ 61,039.35
tether
Tether (USDT) $ 1.00
xrp
XRP (XRP) $ 0.528059
binance-usd
BUSD (BUSD) $ 1.00
cardano
Cardano (ADA) $ 0.4343
dogecoin
Dogecoin (DOGE) $ 0.115844
litecoin
Litecoin (LTC) $ 70.21
solana
Solana (SOL) $ 148.00