SEC’s Hester Peirce opposes crypto bailouts — SBF didn’t get the memo


US Securities and Exchange Commission (SEC) Commissioner Hester Pierce has spoken out against crypto-company bailouts, arguing that it is actually better to “let these things work” to create a more sustainable industry.

Pierce, the US Securities and Exchange Commission’s most pro-crypto commissioner, told Forbes that the recent crash in crypto, while painful, is separating the strong from the weak:

“When things are a little more difficult in the market, you find out who’s really building something that might last in the long and long term and what’s going to go away.”
The commissioner made it clear that she does not support bailouts for anyone in the cryptocurrency industry, especially those who have mismanaged risk and become over-leveraged.

“Crypto does not have a rescue mechanism […] I don’t want to go in and say we will try to figure out a way to rescue you if we don’t have the authority to do it. But even if we do, I will, I don’t want to use that authority, we really need to let these things go.” Working “.

The SEC commissioner’s comments come amid a slew of bankruptcies, layoffs and hiring freezes in the cryptocurrency market.

Crypto Whales to the Rescue
FTX and Alameda Research founder Sam Bankman-Fried takes a different approach and steps in to save crypto companies struggling due to the market crash.

On Tuesday, Bankman-Fried told his 706,900 Twitter followers that he and FTX would inject $250 million into BlockFi through a revolving credit facility to strengthen its balance sheets and strengthen the platform.

This came just days after Alameda Research agreed to give Voyager Digital a $200 million (USDC) loan and a “revolving line of credit” worth 15,000 Bitcoin (BTC), worth $446.3 million at the time of writing, to use “if necessary to protect Customer assets.

Bankman-Fried told NPR on Sunday that this is something he and his companies have done “many times in the past” in order to “stop contagion” amid a flurry of cryptocurrency crashes.

In an interview with Bloomberg on Wednesday, Anthony Scaramucci, founder of SkyBridge Capital, called FTX CEO “the new John Pierpont Morgan,” referring to the Wall Street financial baron who pledged his own money and persuaded others to do the same for the shore in the banking system during The Bankers Panic of 1907:

“It’s saving the crypto markets the way the original JPMorgan did after the 1907 crisis.”
However, Pierce argues, the economic downturn can be a valuable educational opportunity for market participants and regulators to learn how the market moves in times of stress.

Related: Crypto Biz: Crypto Massacre Pushes Percentage, Three Equities Close to Bankruptcy, June 9-16

“It helps us to see the touchpoints. It is a moment, not only for market participants to learn, but for regulators to learn as well so that we can get a better idea of ​​how the market works.”
The market turmoil has already taken a toll on lending platform Celsius Network and crypto-focused hedge fund Three Arrows Capital (3AC), which is facing bankruptcy after incurring nearly hundreds of millions of liquidations linked to the ongoing collapse of the Ether (ETH) price.



Please enter your comment!
Please enter your name here