Hester Peirce Teases Pro-Crypto Changes To Expect Under New SEC

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As a seasoned crypto investor with over a decade of navigating the ever-evolving digital asset landscape, I find myself filled with cautious optimism upon hearing the news about potential pro-crypto changes under the incoming US SEC chair, Paul Atkins. Hester Peirce’s hints at an easing of stalling ETF applications and a possible rollback of harsh policies against in-kind redemptions and staking have me hopeful for brighter days ahead.

Hester Peirce, a Commissioner at the US Securities and Exchange Commission (SEC), has suggested that there could be positive developments for cryptocurrencies when Paul Atkins takes office as Chairman in January. Although the specific policy changes haven’t been disclosed yet, Peirce is hopeful that some delayed applications for crypto Exchange-Traded Funds (ETFs) may finally receive approval.

The New US SEC and Crypto

In a conversation with Zack Guzman from Coinage media, Peirce implied that the process would be straightforward if most commissioners at the SEC share her views on the matter. This remark was made in response to a question about whether she believes it’s plausible for an In-Kind Spot Bitcoin and Ethereum ETF to become a reality.

BREAKING: SEC Commissioner Hester Peirce previews new pro-crypto changes coming to the SEC

ETF in-kind redemptions and ability for ETF issuers to begin staking likely done “early on”

Both ETFs now have more than $100B in AUM

— Coinage (@coinage_media) December 20, 2024

Regarding Ethereum ETF staking and related matters, Hester Peirce anticipates that the general public might bring up these topics sooner rather than later, especially with the incoming chairman. Notably, when Bitcoin and Ethereum were initially being evaluated, issuers had to find a middle ground between in-kind and cash offerings.

Under the leadership of Gary Gensler, the commission advocated for a method where settlements are done in cash. However, issuers tend to favor an ‘in-kind’ settlement, which allows investors to receive the settlement in the actual currency of the underlying asset. This approach offers a better value to users as compared to the ‘cash settle’ method, which pays out in US Dollars and may not provide the same level of value due to potential exchange rate differences.

In similar fashion, the concept of staking also offers extra returns for those investing in Ethereum ETFs through spot markets. However, regulatory bodies have expressed concerns over these flexible proposals due to the high risk associated with volatility. Meanwhile, as we anticipate potential approval, Bitwise has taken steps to enhance its services by acquiring Attestant – a staking service that will be made available to their own clients.

Under the nominated Paul Atkins’ US SEC, there might be a rollback of these harsh policies.

More than the Markets Regulator

Beyond just the US Securities and Exchange Commission, shifts happening in the cryptocurrency sector extend to other areas. Currently, there’s a significant discussion revolving around Operation Chokepoint 2.0. According to claims, this operation encourages banks, subtly, to limit banking services for companies involved in crypto and Web3 technologies.

These actions have resulted in the closure of banks such as Silvergate, and they’ve hindered banks like Custodia from reaching their full operational potential.

Significantly, prominent figures in the industry are advocating for an investigation into this particular operation. Previously, Crypto Czar David Sacks voiced his opinion that it merits further examination. Meanwhile, as the US Securities and Exchange Commission works towards rectifying internal issues, it may also be necessary to reassess federal policies that appear unfavorable to the cryptocurrency market.

 

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2024-12-20 20:12