Securities and Exchange Commissioner Hester Peirce has come out on topics such as unifying the government’s rules on crypto and, obliquely, XRP.
The cryptocurrency community knows Hester Pierce as ‘Crypto Mom’ for her positive outlook on crypto combined with her powerful position. She lifted the cover a little regarding SEC regulation and enforcement in an interview on Jan. 8.
More regulatory clarity
Hester said that there needs to be regulatory clarity. This applies especially for interagency discrepancies and enforcement action. She stated,
“something might be characterized as one thing by another agency, yet still be a security under our rules, and that can be frustrating for people […] I have called for more clarity, because I actually think it can be difficult to determine whether something fits within the security bucket or not, and we could do more to provide some guideposts for what that would be”.
Hester remained silent on the current charges being pursued by the SEC against Ripple. She did say that these matters tend to be dealt with in an out of court settlement.
SEC’s charges against Ripple
Recently, the SEC charged Ripple and two of its executives for the unlicensed sale of securities. The SEC alleges that the Ripple network’s native cryptocurrency, XRP, is a security. Therefore, these parties conducted over $1 billion in XRP sales that weren’t properly regulated.
The Ripple team and community XRP holders disagree with the SEC, and state that XRP is not a security. They hold that XRP is a commodity, currency, and tradable asset like Bitcoin or Ethereum.
The SEC previously stated that Bitcoin and Ethereum regulation was not under its remit. However, it has not declared its position on any other cryptocurrencies.
The XRP price fell over 50% following the announcement. It is rising now, but it is not at yet at recent levels.
However, pundits still speculate regarding the regulation of XRP. Many XRP users question why the SEC is pursuing Ripple and its cryptocurrency after more than seven years since the project’s launch. They claim that this is not in the best interest of investors. As such, the SEC needed to act sooner if they wanted to allege that XRP is a security.
Hester said that a settlement is a possible outcome. The federal administration is changing, however, and we cannot tell at this time.