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Taming the Digital Wild West: SEC Commissioner Hester M. Peirce on Balanced Crypto Regulation

As the SEC develops regulation around cryptocurrency, they're aiming for an elusive sweet spot: not too much, not too little.

As the cryptocurrency sector grows, outsiders remain suspicious of the blockchain space for its lack of regulation and a persistent stigma around fraudulent activity. SEC commissioner Hester M. Peirce sat down with Roundtable's Rob Nelson to discuss the process of regulating crypto.

In this segment, Peirce discusses regulators' role in curbing malpractice while fostering the conditions for innovation.

As officials develop regulation around blockchain, they face the dilemma of how to limit fraud while avoiding cracking down on legitimate practices. The speed of innovation in the Web3 space, Peirce notes, makes it difficult to foresee the positive and negative applications of regulatory policy.

"We definitely want to prevent fraudulent activity and go after fraudulent and bad actors," Peirce explained, "but on the other hand, we want to keep things open enough so that people who have interesting ideas are able to experiment."

The current lack of regulation, Peirce said, can actually make things more difficult for newcomers to the crypto space.

"If we were to establish clear regulatory guidelines, it would make it easier for us to identify the people who are the bad actors, and it would also allow people who really want to do the right thing to figure out how to navigate better," she said. "Right now it leaves the people who are trying to do the right things in a pretty difficult position."

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Peirce emphasizes that regulators' role is to protect investors, not to control their decision-making.

"The core point here is not to make sure that the regulator is making decisions for people. The regulator should be serving people," Peirce said. "So as things change, you might decide that that needs to look a little bit different. New technology for brings us new tools as regulators."

Roundtable Guests:

Hester M. Peirce, SEC Commissioner

Watch the full discussion here: