In a 1st interview following the suit against Ripple, SEC Commissioner Hester Peirce said enforcement actions are never a good way to provide regulatory clarity.
According to Peirce, the howey test doesn’t offer enough clarity and is contrary to Financial Crimes Enforcement Network rules.
Hester Peirce speaks about the suit against Ripples for the first time.
However, she detected that “everyone must investigate the facts and circumstances. She also said her own views are not the same as her colleagues. For associate social controlaction to pass, 3 of 5 SEC commissioners should select favor of it.thereupon in mind, Peirce said:
In enforcement actions, it’s usually a unanimous vote, however it’s most times not. Once that vote has been taken, the proceeding moves forward. Often, you’ll see that the proceeding ends in a very settlement. Typically it goes through and the proceeding really plays out in court.
Regulatory ambiguity over XRP
The interview conjointly went intoassociate argument created by Ripple,that argues that XRP shouldn’t be classified as a security. Back in 2015, the U.S. Treasury Department’smonetary Crimes social controlNetwork (FinCEN) classified XRP as a digital currency. Asked concerning this contradiction with the SEC’s view, Peirce said the agency has its own set of rules to follow:
I think that’s not only a problem to digital assets, it’s a major drawback to the open-ended category called ‘investment contract’.
Investments made with profit expectation are under the bequest howey test.