Earlier this month, the US Commodity Futures Trading Commission charged five corporate entities and three individuals who own and run BitMEX, including the well-known CEO, Arthur Hayes. The move has sparked concerns regarding the future of the crypto industry. However, SEC commissioner Hester Peirce believes that the recent legal action taken against BitMEX shows the need for the global industry to take AML regulations seriously.
Commonly referred to as the “Crypto Mom” within the digital currency industry, Peirce said in an interview with “Unchained Podcast” on October 13, that the charges placed by the U.S. Department of Justice (DOJ) and the Commodity Futures Trading Commission (CFTC) has been a wakeup call for crypto-based entities about U.S. anti-money laundering (AML) and know your customer (KYC) regulations.
“I think that the message has been coming to the industry fairly loud and clear on the AML/KYC front, and I’m sure it will continue,” said Pierce.
“It’s definitely sending a message to the crypto world that when there are U.S. users of a product or a service, there’s going to be enforcement of U.S. laws.”
SEC is unfair about Bitcoin ETF
Furthermore, she discussed the SEC’s ignorance about a Bitcoin exchange-traded fund (ETF). A product that is highly anticipated, and is expected to be the key to large-scale institutional adoption of cryptocurrencies.
An ETF provides a regulated means for institutional investors to bet on cryptocurrencies without going through the risks of holding the actual assets. The Bermuda Stock Exchange announced the launch of the world’s first Bitcoin ETF last month, but that’s outside the SEC’s jurisdiction.
The SEC has continually rejected multiple proposals from Bitcoin ETFs from renowned names like Wilshire Phoenix, NYSE broker Arca, and the Winklevoss twins, citing fears of market manipulation.
But Peirce on the other hand believes that the SEC must judge an ETF “on its own merits”. She believes that Bitcoin ETFs are quite popular among investors and would act as a major entry point for investors wanting to get exposure to the crypto industry.
She said that the SEC’s attitude towards a Bitcoin ETF is unfair to investors. She continued:
“In the past I think [the SEC has] taken an approach that is a merit regulation approach and is saying ‘we don’t think that investors can make wise decisions for themselves so we’re just going to cut this product off from them altogether.’ It just doesn’t make any sense to me.”