A senior member of the US Securities and Exchange Commission (SEC) criticised efforts by her colleagues to clamp down on cryptocurrencies, revealing a split at the top of the regulator over how to handle the rapidly expanding market for digital currencies.
Hester Peirce, one of the watchdog’s five commissioners, told the Financial Times she was “concerned” about efforts by several US regulators to more actively monitor the crypto market, placing her in opposition to SEC chair Gary Gensler, who favours bringing cryptocurrency rules in line with more traditional assets.
READ: SEC warns it is monitoring AMC and other memestock trading activity following latest rally
“I am not sure that’s going to be great for innovation”, said Peirce, who worked as a researcher at free-market think-tank Mercatus Center before being appointed to the SEC by Donald Trump in 2018.
Instead, Peirce said self-regulation in the market can be “pretty effective” and that regulation “doesn’t all have to happen at government level”.
The commissioner’s comments suggest Gensler may encounter internal hurdles in his efforts to rein in the crypto market, which shot to prominence at the start of 2021 as an influx of investor cash saw the price of original crypto Bitcoin boom to record highs, taking most of the market with it.
However, regulators have increasingly eyed the digital asset market as a source of concern given its high level of volatility and its use as an anonymous payment method by criminals.
In early trading in London on Wednesday, Bitcoin was up 3.5% over the last 24 hours at US$34,179, giving it a market cap of US$640bn.