Hester Peirce vehemently criticizes SEC, while Gurbir Grewal dismisses SEC’s critique: Law Decoded

SEC Commissioner Hester Peirce has criticized the agency’s guidance on crypto custody and called for more public interaction. Speaking at the SEC Speaks conference, Peirce referred to the agency’s policy guidelines as a “particularly pernicious weed” in its “secret garden.” She specifically mentioned the Staff Accounting Bulletin 121 (SAB 121), which prohibits banks from custodying crypto assets on behalf of clients. On the other hand, Gurbir Grewal, the director of the Division of Enforcement at the SEC, defended the agency against accusations of making up rules on crypto. Grewal claimed that companies in the crypto industry have made creative attempts to avoid the SEC’s jurisdiction. He reiterated that the SEC’s standard for determining security under the Howey test has been consistently applied. However, he did not address the reports about Ether (ETH) possibly being classified as a security rather than a commodity. The SEC is currently seeking public comments on proposed rule changes for listing and trading shares of three spot Ether exchange-traded funds (ETFs). Bitwise, Fidelity, and Grayscale have submitted applications for ETFs, and the public has 21 days to respond. Meanwhile, in the European Union, the Markets in Crypto-Assets Regulation (MiCA) requires the European Commission to evaluate the decentralized finance market and consider specific regulations for the sector. The report will focus on regulating decentralized systems without a clear issuer or service provider. In Argentina, virtual asset service providers must register with the government according to recommendations from the Financial Action Task Force. The country’s securities regulator, Comisión Nacional de Valores (CNV), stated that unregistered providers will not be allowed to operate in the country. The requirements may impact businesses and customers seeking to use their services. Finally, the Monetary Authority of Singapore (MAS) announced amendments to the Payment Services Act (P.S. Act) to expand the regulated services related to digital payment token (DPT) service providers. MAS clarified that the law covers custodial services for DPTs, token transfers, exchange facilitation, and cross-border money transfers, even if the funds are not accepted or received in Singapore. The updates will also introduce additional requirements for DPT service providers.