SEC Commissioner Hester Peirce has once again criticized her agency, this time focusing on the regulator's guidance regarding cryptocurrency custody, while also advocating for more engagement with the public. Peirce expressed her discontent with the SEC's policy guidance, referring to certain regulations as "particularly noxious weeds" that have flourished within the agency's "secret garden."
Peirce's remarks were prompted by Staff Accounting Bulletin 121 (SAB 121), which prohibits banks from holding crypto assets in custody on behalf of clients. This directive has drawn Peirce's scrutiny, highlighting her ongoing concerns about the SEC's approach to regulating the cryptocurrency space.
In contrast, Gurbir Grewal, director of the SEC’s Enforcement Division, defended the regulator's stance on cryptocurrency regulations. During the same SEC conference, Grewal countered criticisms by asserting that companies within the crypto industry have attempted various creative methods to evade the SEC's jurisdiction while still operating within the United States.
Grewal emphasized that the SEC's criteria for assessing security under the Howey test have been consistently and clearly applied. However, he refrained from addressing specific reports suggesting that the SEC is considering classifying Ethereum as a security rather than a commodity, thereby potentially subjecting it to CFTC oversight.
Meanwhile, the U.S. Securities and Exchange Commission is actively seeking public feedback on proposed rule changes related to the listing and trading of shares for three spot ether exchange-traded funds (ETFs). Asset managers Bitwise, Fidelity, and Grayscale have submitted applications for spot ETH ETFs, which will be listed on NYSE Arca and Cboe BZX exchanges. Public commentary on these proposals is open for 21 days following their publication in the Federal Register, with a final decision expected from the commission in May.
