SEC Commissioner Hester Peirce Criticizes Crypto Custody Guidance
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Concerns Over Crypto Custody Guidance
Peirce raised concerns about the SEC's Staff Accounting Bulletin 121 (SAB 121), labeling it a "pernicious weed" that hampers investor protection and stifles experienced banks and broker-dealers from entering the crypto custody business due to its capital implications. She highlighted the potential risks associated with custodial failures, urging for a reevaluation of the guidance.
Calls for Public Engagement
Peirce lamented the SEC's diminishing engagement with the public, particularly in emerging technology sectors like crypto. She underscored the importance of open communication, clear guidance, and fostering responsible innovation. Peirce advocated for restoring trust and facilitating constructive dialogues to address regulatory challenges effectively.
Support for Advisory Committee
Coinbase chief legal officer Paul Grewal echoed Peirce's sentiments, endorsing her proposal to establish an advisory committee comprising chief compliance officers. This committee aims to enhance understanding of regulatory rules and their practical implications, fostering collaboration between regulators and industry stakeholders.
Looking Ahead
Peirce's remarks signal a growing debate within the regulatory landscape regarding crypto custody and public engagement. As stakeholders push for clarity and collaboration, the future of crypto regulation remains a focal point for discussion and potential reform.
