A senior SEC official explained that there is an urgent need for clear cryptocurrency regulations as major companies such as Tesla, MasterCard and BNY Mellon adopt the alternative asset class.
Hester Peirce, the Securities and Exchange Commission Commissioner, said: Agency Reuters in an interview: It’s too early to draw political conclusions from what happened with GameStop, but it was good that a new generation of investors was able to participate in the market.
Cryptocurrency enthusiasts have dubbed Pierce Crypto Mom, given her supportive stance on crypto assets, and Pearce has long called for regulators to put in place clear regulations that allow crypto assets to thrive without fear of breaking the law.
Not only has there been calls for clarity for quite some time and that the new management provides the opportunity to take a fresh look, but it is also a moment when others in the market seem to be taking a fresh look, too, Pearce said.
Bitcoin hit record highs this month after electric car manufacturer Tesla said it had invested $ 1.5 billion in the cryptocurrency.
BNY Mellon said it was helping customers preserve, transfer and issue digital assets, while Mastercard also said it was opening its network to some cryptocurrencies.
“It adds to the urgency for us to take some kind of action in this area to provide more clarity,” Pearce said.
The market plunged into a crisis last month when users of the low-cost retail platform Reddit came together to raise prices for GameStop and other stocks, putting pressure on hedge funds that bet against those stocks.
The resulting volatility has led to huge sums being required from clearing houses that secure trades, prompting many retail platforms to suspend purchases of affected securities.
The incident sparked anger among lawmakers, as on Thursday Congress hears testimony from (Vlad Tenev) Vlad Tenev, chief executive of trading app Robinhood, and (Ken Griffin) Ken Griffin, chief executive of the Citadel hedge fund.
Pearce said: The Securities and Exchange Commission is studying a series of issues, including market volatility, the role of retail brokers, and how the post-trade market works.
She added: “Seeing new investors participating in the markets is a good thing, and of course we want them to be educated and skeptical, and there is a wide range of market participants that can help improve price formation.”