Why the SEC's Crypto Task Force With Hester Peirce Is Such A Big Deal

The Securities and Exchange Commission has been the crypto industry's largest regulatory enemy for the last four years — suddenly, it could very well become its largest advocate.

With Hester Peirce, affectionately known as "Crypto Mom," now heading up the SEC's newly established Crypto Task Force, the tides are turning in favor of clarity and progress. As Commissioner Peirce predicted last month in an exclusive interview with Coinage, change is finally here, and it’s going to be faster than people anticipate.

For years, the SEC’s approach to crypto has been fraught with uncertainty and enforcement-heavy tactics. The SEC's own announcement conceded that oversight under the old regime amounted to, "confusion about what is legal, which creates an environment hostile to innovation and conducive to fraud." That’s now changing.

The announcement to form a dedicated task force to establish clear rules aligns with Peirce’s vision of a regulatory environment where builders can innovate freely without fear of legal backlash. Establishing that clarity will finally remove that overhang.

"I want people to get to the point where... they're spending their time talking about the technology and its potential," she recently told Coinage.

As Commissioner Peirce predicted when we last spoke with her, this pro-clarity pivot would come first. What's to follow now gets even more interesting. When Coinage asked about revisiting components of the crypto ETFs that were not approved, Commissioner Peirce predicted that the agency would be able to more easily take a look at revisiting those decisions after a new Chair begins. Commissioner Mark Uyeda was named Acting SEC Chair earlier this week until Paul Atkins is confirmed. Ethereum ETFs being able to stake their assets under management or allowing in-kind redemptions (over dollar-based redemptions) are likely up first.

The original argument was that in-kind redemptions would prevent unnecessary conversions of the underlying asset in a crypto ETF to cash and could create efficiencies from tax and market perspectives. As for staking, the Ethereum ETFs have attracted more than $10 billion, while Bitcoin ETFs have attracted more than $120 billion in assets under management. ETF issuers aren't allowed to do anything beyond simply holding the crypto assets in custody. Exchange Traded Products in other jurisdictions, like Europe, have won the ability to stake the assets they hold in custody to earn additional yield.

"If it changes from a majority of Commissioners who don't want things to go through to a majority of Commissioners who do want things to go through, then yeah, it's easier," she said. "I imagine that that question is going to be posed to us early on."

Peirce’s leadership comes at a crucial moment. Her focus on integrating these innovations responsibly within the U.S. regulatory framework could redefine global standards. She's long proposed incredible ideas, like a token safe harbor framework she originally proposed in 2021 that would allow builders to operate without fear in a regulatory sandbox — but none of those were listened to under the old way of thinking at the SEC.

But the significance of Commissioner Peirce’s role extends beyond her policy implementations. She has been a staunch advocate for crypto innovation since her early days at the SEC. Her support for builders at crypto conferences has meant the world in a very stressful regulatory environment. Her understanding and public resistance to what was being done under the prior leadership left a glimmer of hope open for the industry that desperately sought change. I remember asking her at one point if she were getting tired of filing all the dissent letters to point out where enforcement action after enforcement action continued to rue confusion among crypto builders.

"I would love it if my agency opened the doors to innovation," she said in 2023. "It's not about having the SEC say, 'We think crypto is the future of the country.' That's not what I'm asking for. I'm asking just for the doors to be open, to say people can experiment."

Luckily, it finally seems like that time has come. The road ahead is promising. And for an industry long bogged down by regulatory ambiguity, Commissioner Peirce’s leadership could mark the beginning of a new chapter — one defined by clarity, collaboration, and the unleashing of crypto’s full potential in the U.S.

Coinage members can watch our full interview recaps with Commissioner Hester Peirce above. To support our community-owned outlet, own it with us, and unlock other exclusive benefits, mint one of our Membership Passes today or Stake with us today! Chat with Coinage in our Discord.