Crypto rules are urgently needed as major companies back the asset: SEC official

By Amirtha P S, Desk Reporter
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As major companies including Tesla, BNY Mellon and Mastercard show high support for cryptocurrencies a strict regulatory regime needs to be urgently formulated for the alternative asset class, a top Securities and Exchange Commission (SEC) official opinionated.

Hester Peirce, a Republican commissioner at the agency states it was too soon to draw policy conclusions from a “Reddit Rally” in GameStop Corp and other stocks, but it was “wonderful” that a new generation of investors was able to participate in the market.

Ms. Peirce who has been called the “Crypto Mom” due to her supportive attitude towards the asset class, has long advocated for regulators to build a clear rule system to enable crypto assets to thrive without fear of breaking the law.

Bitcoin hit record price this month after electric car-maker Tesla revealed about its $1.5 billion worth investment in the cryptocurrency and BNY Mellon said it would help clients hold, transfer, and issue digital assets. Mastercard also said it would open up its network to some cryptocurrencies.

“It’s not only that there have been calls for clarity for some time and that a new administration brings the chance to take a fresh look, but it also is a moment where it seems others in the marketplace are also taking a fresh look,” Ms. Peirce added.

Last month the crypto market faced a crisis when Reddit users trading on low-cost retail platforms banded together to drive up the prices of GameStop and other stocks, squeezing hedge funds that had bet against those shares. The volatility that emerged from it triggered massive margin calls from clearinghouses that guarantee trades, prompting several retail platforms to stop buying in the affected securities.

The incident sparked outrage among lawmakers on both sides of the aisle. The SEC is examining the spectrum of issues including market volatility, the role of retail brokers, and how the post-trade market functioned.

“To see new investors participating in the markets is a good thing and of course we want them to be educated and skeptical. But a wide range of market participants could help improve price formation,” said Ms. Peirce.

Also Read: I am a supporter of Bitcoin; Elon Musk