Hester Peirce, the Commissioner of the United States SEC, is often referred to as Crypto Mom because of her pro-inclination toward the digital asset space. Time and again she has taken the community’s side and raised issues with others in power.
However, quite recently, Peirce voiced out that she’s against crypto company bailouts. She justified by emphasizing that a more sustainable industry would be created if things are just left to “play out.”
Doing so, to a fair extent, would aid in sieving out non-sustainable companies, and only the ones able to thrive on their own would continue to exist, increasing the competition in the space. Highlighting how the recent crypto crash is aiding in separating strong companies from the weak, Peirce told Forbes,
“When things are a bit harder in the market, you discover who’s actually building something that might last for the long, longer-term and what is going to pass away.”
In just the span of one-and-a-half months, the boats of almost three well-known projects almost submerged. It all began with the Terra ecosystem’s collapse and was followed by Celsius and 3 AC’s debacles respectively.
More often than not, companies end up sinking when they mismanage risks. Things become far worse when they begin wrongly experimenting during such phases. Elaborating on what falls under the commission’s ambit and what doesn’t, Peirce said,
“Crypto does not have a bailout mechanism […] I don’t want to come in and say that we’re going to try to figure out a way to bail you out if we don’t have the authority to do it. But even if we did, I would, I would not want to use that authority, we really need to let these things play out.”
Crypto firms ain’t hesitating though
Companies from the space like FTX, nonetheless, are on a different page at the moment. Just yesterday, for starters, the exchange lent a helping hand to BlockFi by injecting $250 million amid market volatility. Additionally, right after Celsius halted its services, rival firm Nexo readily offered support and was willing to help its rival firm’s clients.
Also, FTX’s chief, Sam Bankman-Fried, openly opined recently that being there for one another and helping contain losses during challenging periods is the right way forward. Elaborating on the responsibility aspect, he asserted,
“I do feel like we have a responsibility to seriously consider stepping in, even if it is at a loss to ourselves, to stem contagion. Even if we weren’t the ones who caused it, or weren’t involved in it. I think that’s what’s healthy for the ecosystem, and I want to do what can help it grow and thrive.”