The head of the U.S. Securities and Exchange Commission says bailing out crypto companies is a bad idea and it is better to “let these things play out” to create a more sustainable industry.
SEC Commissioner Hester Peirce, the most pro-crypto of the commission’s members, told Forbes that market crashes tend to identify the companies and developers who are actually building a good product.
Peirce sees opportunity in downturn
She sees the crypto market downturn as an opportunity for all stakeholders. “When things are a bit harder in the market, you discover who’s actually building something that might last for the longer term and what is going to pass away,” she said.
Peirce also believes that regulators can take this opportunity to get a better sense of how to regulate the market. The SEC has been redoubling its efforts to exercise control over the crypto market, and the commissioner believes that there are things to learn in the current conditions.
She added: “It is helpful for us to see the points of connection. It’s a moment, not only for market participants to learn, but it’s also for regulators to learn so that we can have a better sense of how the market operates.”
Crypto Mom rejects bailouts
Peirce is affectionately known as “Crypto Mom” in the industry, as she is comparatively more open-minded to the crypto market. She says that she would not support the use of bailouts to save crypto companies, especially those that have become over-leveraged and did not make use of risk management principles.
“Crypto does not have a bailout mechanism. And that’s been perceived as one of the strengths of that marketplace. I don’t want to come in and say that we’re going to try to figure out a way to bail you out if we don’t have the authority to do it.
“But even if we did, I would, I would not want to use that authority, we really need to let these things play out,” she said.
Various aspects of the crypto market are now under the scanner of regulators across the world. European Central Bank President Christine Lagarde recently said that crypto staking and lending should be regulated, and this may happen through another regulatory framework.
The recent market crash has brought decentralized finance (DeFi), in particular, to the attention of lawmakers. Stablecoins are now seen as a major point of focus.
Japan has passed a law on stablecoins following the Terra incident, and others are carrying out other measures.
Trusted
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
