Peirce wants U.S. investors to have access to a wider range of investment products, including a bitcoin ETF. Regulators continue to flag cryptocurrency as a concern for money laundering, and there is no sign it will stop anytime soon.
Allegations that regulators overstepped their limits and did not do enough were side themes of The B-Word’s regulatory panel on Wednesday afternoon.
SEC Commissioner Hester Peirce, dubbed the “crypto Mom” by some for his membership in the digital asset industry, said regulators were attacking the crypto industry too harshly, l ‘forcing you to follow a set of rules that are stricter than others.
In contrast, Mike Mosier, director of the Financial Crimes Enforcement Network (FinCEN) expressed concern that regulators were not doing enough to address the role that bitcoin can play in money laundering and should do something about it. before a “major event” occurs.
Canadian and US traders with access to the Toronto Stock Exchange have been able to purchase shares of a number of listed bitcoin ETFs since February.
The main concern of regulators in Ontario was the quality of the custody solutions available in the market. Their doubts about the existence of investment grade solutions negated attempts in 2017 to list an ETF.
“I think they were right to have all of these concerns in 2017. Space is very different three years later than it was then,” Brian Mosoff, CEO of Ether Capital, who acted as a technical consultant for Purpose Investments who listed one. early bitcoin ETFs, Blockworks said in an interview in February. “Closed funds have been in the market for quite a while and have proven that custodians are not going to get hacked.”
Fast forward to 2021, and Peirce sees no technical or infrastructural reason to delay or cancel these ETF applications. Rather, for the regulator, it is about not letting the “average American” have access to something that they deem risky and complex.
“I never imagined that I would be in this situation where we wouldn’t have approved one yet and other countries are moving forward,” Peirce said during the panel. “We should see it as trying to give people the widest range of options possible.”
Peirce said the SEC should not be a “merit regulator,” determining whether an investment product is good or bad because that mindset actually negates market opportunities that would have proven to be profitable.
“We shouldn’t be deciding whether something is good or bad, an investor thinks of their entire portfolio, and sometimes we think in ad hoc terms of a particular independent product,” she said. .
However, Peirce recognizes that crypto – with its wild market swings – is more risky than a traditional equity-backed ETF, but it is up to the consumer to assess their risk tolerance and make the decision for themselves. ‘investment.
“You have to be careful and ask yourself if you can afford to lose this money and consider what your risk tolerance is,” she said, noting that the idea of licensing investors needs to change so that more people have access to high-return opportunities. such as private equity sales for startups.
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