The U.S. Securities and Exchange Commission (SEC) may be on the verge of one of the most dramatic policy changes in its history.
As the agency prepares for a leadership transition, SEC Commissioner Hester Peirce has hinted at a potential shift away from the SEC’s historically cautious stance on cryptocurrencies toward a more innovation-friendly approach.
In an exclusive interview, SEC Commissioner Peirce expressed optimism about the SEC’s future under new leadership. With SEC Chairman Gary Gensler set to step down on January 20, 2025, and former SEC Commissioner Paul Atkins set to take over, Peirce described the transition as a time of “optimism” and “opportunity.”
“It’s a transition period for everybody in Washington right now, and I think the same is true for the SEC,” Peirce said, acknowledging that the full impact of the new administration will take time, while noting that some changes could start immediately.
Commissioner Peirce highlighted two key areas ripe for reconsideration under the new administration: cryptocurrency exchange-traded funds (ETFs) and staking for Ethereum-based ETFs.
The SEC has previously resisted allowing in-kind payments, which could streamline ETF operations and improve tax and market efficiency by preventing unwanted assets from being converted to cash. Similarly, while bitcoin and ethereum ETFs have attracted billions in assets, U.S. issuers remain prohibited from staking those assets for yield.
“If the majority of Commissioners who don’t want things to work out turn into a majority of Commissioners who do, then yes, it would be easier,” Peirce explained, expressing his belief that these issues would be revisited early on under new leadership.
Peirce also hinted at broader regulatory reforms, including potentially stepping back to allow the Commodity Futures Trading Commission (CFTC) to take on a more significant role in overseeing certain crypto markets.
“We need to think about things in different stages,” Peirce said, suggesting that initial efforts could focus on issuing no-action letters or exemption orders to provide clearer guidance to crypto companies.
Peirce also proposed reevaluating whether certain transactions qualify as securities, aiming to reduce regulatory overreach.
*This is not investment advice.
