The role of the U.S. Securities and Exchange Commission is to give people regulatory clarity, not commentary around whether crypto is good or bad. Let the market speak for itself and let the people decide. SEC Commissioner Hester Peirce told an ETHDenver audience yesterday. 

The crypto-friendly commissioner spoke out against the agency’s enforcement-only approach and how the regulatory ambiguity is hurting Americans and America. 

“Some of the choices that the SEC has made are very strange from the perspective of people who favor regulation as a solution,” she said. “Because when you push entities away from the United States, you’re actually pushing them outside of the reach of regulatory agencies. If you really want to sort the bad behavior from the good behavior, having rules that are clear to people who want to follow them is a much better approach.” 

Peirce, who is an exception to the rule at the SEC, said “the whole concept of decentralization stands very much in contrast to what we’re used to at the SEC. When you have someone interacting with code instead of a person or an entity, it’s a real challenge for the SEC to figure out what to do with that.” 

“Frustrating and fractured” inside the SEC 

Regulation, however, shouldn’t be a one-sided conversation, communicated through the latest enforcement press release. Peirce said the broker dealer rule, which essentially requires projects to register as dealers “is troubling.” A part of this rule is the redefinition of an exchange, which could also impact people building decentralized exchanges. 

“I’m quite worried about where that rule is going to go. As I read it, it basically says you better centralize, get out of the U.S. or if you don’t want either of those, you can shut down,” she said. 

The conversation also touched on protecting open-source developers who have become fearful about being prosecuted for the code they write, as well as everyday Americans being surveilled for their financial activities. “In my spot at the SEC, one of the areas I’ve grown most concerned about is the expanding use of the financial system to surveil Americans,” Peirce said. “Centralization means you have concentrated risks. Decentralization can actually bring resilience and strength to the financial system.”

Read more: A collection of regulatory coverage from Decential

While SEC Chairman Gary Gensler continues to be outwardly hostile toward the industry, Peirce believes we need proposals waiting in the wings. “I always say, maybe Chair Gensler will wake up tomorrow morning having had an epiphany – so we need to have ideas on the shelf ready to go when that happens.” 

The commissioner pushed the audience to consider if and how much the industry wants the SEC involved, in response to Wednesday’s Coinbase outage, where users saw their account balance drop to zero. 

“If you come to us when something goes wrong and say where were you?, then you’re saying you want us to be there,” she said. “You have to figure out what the balance is. Do you want us there or not? We, as a country, need to figure out when we want a regulatory framework and when we don’t.”

When asked about the potential for a spot Ethereum exchange-traded fund, the commissioner replied, “it’s under consideration.”