U.S. SEC Commissioner Not In Support Of Bailout To Crypto Firms

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Crypto Regulation
U.S. SEC Commissioner Not In Support Of Bailout To Crypto Firms

The United States Securities and Exchange  Commission (SEC) commissioner, Hester Peirce, sees no reason why the SEC should bail out crypto companies. Peirce believes that it is best to let things pan out.

SEC Commissioner Rejects Intervention

Hester Peirce is arguably the most pro-crypto official among the commission’s officers, hence the moniker “crypto mom.” Despite her support for the digital asset industry, Peirce revealed she would not participate in any proposed bailout for crypto companies.

According to the SEC commissioner, the crypto space lacks the mechanism in place for any bailout to happen. There is no single risk management principle in place for crypto assets. As a result, Peirce noted that the commission has no authority to sanction a bailout.

However, Peirce added that even if the SEC has the authority to do so, she will not engage in the process as she believes that allowing things to play out is best for the industry.

Furthermore, the SEC commissioner added that allowing the industry to come to terms with the present challenges is best. Peirce noted that this is the time to discover who is developing a product for the long term and which will fizzle out.

She believes there will be an opportunity to come out of the present market situation despite the painful loss of assets.

Crypto Assets are Now the Focus of Regulators

Following the broader crypto market collapse, various aspects of the industry are being scrutinized by regulators worldwide. The President of the European Central Bank (ECB), Christine Lagarde, recently announced the regulation of staking and lending crypto tokens.

The ECB has been vocal about the several investments that have sprung up as crypto adoption rises and the industry continues to expand. However, Lagarde’s call for more regulations may likely lead to another rule to address it.

Decentralized finance (DeFi ) is another area that has been under the microscope of regulators. The recent market storm did not help DeFi’s case as the lawmakers see it as a potential issue if not taken care of in the long run.

Similarly, the Terra UST meltdown impacts the prospect of stablecoins, once regarded as the safest investment tool. Many countries have taken the initiative to focus on regulating stable coins within their jurisdictions.

For its part, Japan has already passed a new regulation regarding stablecoins on the heels of the Terra UST collapse. Other countries, like South Korea, are also inching toward another law on stablecoins.

Is a Rescue on the Way?

The industry is still in a bearish trend, which is already becoming a point of worry, necessitating urgent action. While others continue to lament, Sam Bankman-Fried, founder of FTX, is on a rescue mission.

Bankman-Fried seeks to rescue struggling crypto companies heavily impacted by the recent market uncertainties. In a recent Twitter post, the FTX founder revealed that he would be injecting $250 million into BlockFi.

Celsius Network, Three Arrows Capital, and others are struggling to stay afloat due to losing millions in liquidation.

Ifeanyi Egede

Ifeanyi Egede is an experienced and versatile writer and researcher. He has keen interest in blockchain technology, cryptocurrencies, NFTs, Web3, metaverse, fintech and emerging technologies. He has tons of published works both online and in the print media. He has close to a decade of writing experience. When he is not writing, he spends time with his lovely wife and kids.