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Crypto Mom Hester Peirce Does Not Support Bailouts for Collapsing Digital Asset Companies

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Despite her bullish defense of the growth of the crypto industry, Securities and Exchange Commission (SEC) Commissioner Hester Pierce, aka “Cryptom Mom,” would never have supported her rescue from the crisis. On Friday, she said that the lack of such a mechanism is actually a strength of the market.

Let bad companies fail

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AT interview Along with Forbes, Pierce clarified that the SEC does not have the authority to be a “systemic risk regulator” responsible for determining which institutions need government support. However, even if that were the case, it would not support such measures for the multitude of crypto platforms facing problems today, especially if they were irresponsibly overloaded.

“I don’t want to come in and say that we will try to find a way to help you out,” she said. “But even if we did, I wouldn’t want to use that power, we really need to let these things develop.”

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As cryptocurrency prices return to late 2020 levels, several overleveraged lending platforms and venture capital firms are desperately looking for liquidity to stay afloat. For example, firms such as Celsius and Babel Finance have been forced to disable user withdrawals due to a market pullback and financial contagion.

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BlockFi has also accepted a $250 million loan from FTX, while venture capital firm Three Arrow Capital is considering similar options.

As a member of the Securities and Exchange Commission, Pierce pays attention to those companies that fail under such stressful conditions so that they can “see how the market works.” She believes the commission is more likely to receive advice on how to handle these circumstances during a bear market.


Pierce disagreed with Chairman Gary Gensler on a number of topics, not the least of which is the delay in the approval of the Bitcoin Spot ETF. However, when it comes to crypto lenders, she is just as skeptical as he is about some of their budding earnings.

“When you have attractive returns, do you need to ask questions about the risks involved?” she said. “And if you’re not getting answers, you need to consider whether you want to make that investment.”

Lummis-Gillibrand bill

Cryptomom showed cautious optimism about the Lummis Senate oddball couple and the landmark Gillibrand Cryptocurrency Bill introduced earlier this month. All that matters to her is that it provides normative clarity, even if not in the structure she seeks.

The legislation would transfer the jurisdiction of the two largest cryptocurrencies to the Commodity and Futures Trading Commission rather than the SEC. Bitcoin and Ethereum alone account for more than half of the total market capitalization of digital assets.

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