On the most recent episode of her Unchained podcast, Laura Shin spoke with actor Coy Garrison. Hester Pierce’s previous lawyer has an extensive understanding of the SEC’s operations. Garrison discusses the SEC’s interaction with the cryptocurrency industry in this podcast.
Anxiety is High
Coy Garrison concedes that it’s a tense period, with the SEC and the crypto sector at odds. The latest de-peg of the TerraUSD caused a cryptocurrency crash. The crypto market has lost roughly $40B, with major cryptos experiencing massive losses. The SEC has had a stormy relationship with cryptocurrency. With the Ripple court battle attracting the attention of tabloids daily.
The agency sued Ripple for not registering $1.4B in securities. Garrison noted that cryptocurrency had gone a long way since his days as a young attorney at the SEC. According to him, Washington is paying tremendous interest to cryptocurrency. Gensler supports strict rules in the cryptocurrency world. Garrison sheds light on this fact.
Peirce’s Recent Comments
Commissioner Peirce recently stated that the SEC had thrown the regulatory game. Laura Shin asked Coy Garrison for his thoughts on this. If we don’t let innovation and experimentation occur, we’ll have long-term implications.
Garrison rushed in to agree, stating that he thinks Commissioner Peirce is dead on!” When it comes to collaboration, he thinks the SEC could do more. According to him, the SEC might be encouraging no-action letter requests. They may also be guiding new crypto initiatives. Instead, the SEC has pursued an enforcement-first approach. Over time, it resulted in a stormy relationship between the SEC and the crypto industry.
Laura then inquires why the SEC has not yet approved Bitcoin spot ETFs as an investment vehicle. They allowed Bitcoin futures ETFs. Yet, Bitcoin spot ETFs were not, which has been baffling crypto investors for some time now.
Garrison was optimistic about them. He thought the Commissioner wasn’t prepared to introduce this asset into the market. He went on to say that some people are submitting applications. Most with specific restrictions about ETP to avoid fraud and manipulation.
Garrison explains how they achieve this. They establish a surveillance sharing arrangement with a large regulated market. They show that someone who wishes to commit fraud has to travel there. This topic is under discussion in several venues. Garrison believes that scholarly research is still necessary to reach a decision.