Regulation

Hester Peirce Confirms SEC Rethinking Approach to Crypto Cases

Published

1 month ago

February 11, 2025

Coin2049 Newsletter

The U.S. Securities and Exchange Commission (SEC) is reconsidering its stance on crypto regulation as it reviews past enforcement actions. Commissioner Hester Peirce has confirmed that the agency is moving toward a different approach in handling cases against crypto firms.

During a recent interview, Peirce acknowledged that enforcement had been the primary tool for shaping crypto regulation in recent years. She emphasized that the SEC is now focusing on using other regulatory mechanisms to establish clear guidelines for digital assets.

US SEC Reviewing Crypto Regulation Strategy

The US SEC has relied heavily on enforcement actions to regulate the crypto industry. However, Hester Peirce stated that this method is not typical for policymaking. She explained that the agency is working to shift toward a more structured crypto regulation framework.

“During the past several years, enforcement cases have been used as a way to make regulatory policy; that is very atypical,” Peirce said. “We’re trying to get back to a path where we’re really using our other tools to make policy.”

The SEC’s recent decision to request a pause in its lawsuit against Binance reflects this shift in approach. The agency, Binance, and its co-founder Changpeng Zhao have asked for a 60-day stay in the litigation. The SEC stated that the work of a newly formed crypto task force could influence the case’s outcome.

Hester Peirce Led New Crypto Task Force Taking Shape

Hester Peirce is leading the SEC’s crypto-focused task force, which aims to develop a clear regulatory framework for digital assets. This group is expected to assess which cryptocurrencies qualify as securities and determine the SEC’s jurisdiction in the crypto market.

The SEC’s reconsideration of its crypto regulation amid broader regulatory changes under the Trump administration. Shortly after taking office, President Donald Trump signed an executive order creating a group to advise on crypto regulation. The administration is also exploring the concept of a national crypto stockpile, which could affect the industry’s development.

Peirce’s involvement in crypto policy has earned her recognition in the industry. She has previously supported Bitcoin exchange-traded funds (ETFs) and opposed SEC enforcement actions against crypto firms. Because of this, she has been referred to as “Crypto Mom” by digital asset advocates.

SEC Lawsuits Under Review

The SEC has filed several lawsuits against major crypto companies, including Binance, Ripple and Coinbase. These cases have accused the firms of violating securities laws, misleading investors, and operating without proper registration.

Peirce did not confirm whether the SEC would dismiss any lawsuits but stated that each case would be reviewed individually.

“It’s facts and circumstances,” she said. “We’ll have to look at each case on its merits as we go forward.”

Moreover, requests have been made in other legal disputes involving the SEC and crypto firms. For example, in a separate case involving Lejilex, the SEC and the company have agreed to postpone oral arguments that were scheduled for February 20. The delay extends the decision timeline until at least April 11, 2025.

Concurrently, last year, the agency sued Coinbase, alleging it operated as an unregistered exchange. Other firms, including Ripple, have also challenged the SEC’s authority over crypto regulation.