Commissioner Hester Peirce, known as “Crypto Mom” in the crypto community, has slammed the U.S. Securities and Exchange Commission (SEC) for its $10 million settlement with the cryptocurrency exchange, Poloniex. The SEC announced the $10 million settlement yesterday, with Poloniex being charged with facilitating trades in unregistered securities between July 2017 and November 2019. The SEC had claimed that Poloniex wanted to circumvent regulations.
Poloniex elected to neither admit nor deny any wrongdoing.
The SEC claimed that Poloniex employees “stated internally” that they wanted to be “aggressive” in circumventing securities regulation in a bid to increase market share by listing new crypto assets that may be deemed securities under the Howey Test of 1946. Poloniex neither admitted nor denied any wrongdoing. However, Peirce slammed the regulator’s actions in a public statement, emphasizing the opaque regulatory framework that crypto firms must navigate in the United States. The commissioner highlighted several regulatory matters that the SEC has been criticized for failing to clarify with regards to crypto businesses.
SEC commissioner slams SEC’s decision.
Sympathetic to crypto firms amid not clearly established regulations, Hester Peirce said, “Given how slow we have been in determining how regulated entities can interact with crypto, market participants may understandably be surprised to see us come onto the scene now with our enforcement guns blazing and argue that Poloniex was not registered or operating under an exemption as it should have been.” She added if Poloniex had tried to register as a securities exchange or as an alternative trading system (ATS) with the SEC, the firm “likely would have waited…and waited…and waited some more.” Financial regulators in the country are actively working on establishing more crypto regulations in the coming months.