Leading up to and throughout the crypto meltdown that threw the global markets into turmoil, government entities have scrambled to provide some kind of regulatory framework for managing fraud in the fintech world. Between bills being frantically proposed and abandoned on the floor of the House of Representatives and Securities and Exchange Commission Chair Gary Gensler struggling to identify which cryptocurrencies are even within his office’s jurisdiction, it’s unclear both when and how the U.S. government will be instituting any meaningful regulation of the industry at all.
Amid the hubbub, SEC Commissioner Hester Peirce has had a refreshingly straightforward take on the situation: the government has “dropped the regulatory ball.”
“There's a lot of fraud in this space, because it's the hot area of the moment,” Peirce said at the DC Blockchain Summit in late May. Her comments reflect the growing concern in public and private spaces about the safety of cryptocurrency for investors – concern that has frequently resulted in calls for tighter regulation.
At the same time, Peirce went on to say, what regulation has been put out may do more harm than good. “We're not allowing innovation to develop and experimentation to happen in a healthy way, and there are long-term consequences of that failure.”