TL;DR: If the Joint Staff Statement on Broker-Dealer Custody of Digital Asset Securities Division of Trading and Markets, U.S. Securities and Exchange Commission Office of General Counsel, Financial Industry Regulatory Authority title of the latest US regulator’s efforts at clarity is any indication, the cryptocurrency community is for a long wait. Even lovingly dubbed “Crypto Mom,” SEC Commissioner Hester Peirce, described it as a “version of an escape room” in trying to decipher its meaning.
Hester Peirce Calls Latest Regulation SEC Statement “Version of an Escape Room”
“If figuring out how to deal with the SEC on crypto issues feels like a regulatory version of an escape room,” Peirce quipped, “here’s the latest clue,” and pointed to a joint statement from the US Securities and Exchange Commission on the issue of custody. We think. Honestly, it’s hard to tell. They do tend to meander.
Peirce was originally nominated as an SEC Commissioner in 2016, but was only moved up the bureaucratic chain under the Trump administration during late 2017’s vacancy. She hit the ground running in early 2018, and hasn’t looked back. Her speech Beaches and Bitcoin: Remarks before the Medici Conference in Los Angeles shortly before summer of her first year in office set the tone. She was open to the innovation of initial coin offerings (ICOs), for example, a stance frowned upon by nearly every other regulator, including her boss.
In July, she came out swinging again as the lone dissenting voice in the never-ending struggle for a cryptocurrency exchange traded fund (ETF) voted down by her peers. Peirce labeled the SEC’s reading of its own guidelines as erroneous, insisting the regulator misplaced its focus “on the underlying bitcoin spot market” rather than a regulated environment’s ability to “to surveil trading of and to deter manipulation,” earning her wide praise from the ecosystem, which began referring to her as “Crypto mom” for coming to its defense.
This time around, she simply head shook in public over the latest round of SEC gobblygook on the subject, which contained thousands of words and more than two dozen footnotes. Staffs of the Financial Industry Regulatory Authority (FINRA) and the SEC’s own Division of Trading and Markets attempted to offer insight into their discussions on crypto assets “particularly under the SEC’s Customer Protection Rule applicable to SEC-registered broker-dealers.” It is anyone’s guess as to how binding the discussion is, and what it might mean in practical terms. The statement is as much a term paper on possible scenarios as it is policy prescription, and can be at times overweighted by legalisms and arcane references. Heck, even a trained lawyer and commissioner, namely Hester Peirce, found the entire exercise exhausting. Go figure.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
CONTINUE THE SPICE and check out our piping hot VIDEOS. Our podcast, The CoinSpice Podcast, has amazing guests. Follow CoinSpice on Twitter. Join our Telegram feed to make sure you never miss a post. Drop some BCH at the merch shop — we’ve got some spicy shirts for men and women. Don’t forget to help spread the word about CoinSpice on social media.