US crypto rules like ‘floor is lava’ game without lights — Hester Peirce
SEC Commissioner and head of the crypto task force, Hester Peirce, says US financial firms are navigating crypto in a way that’s similar to playing the children’s game “the floor is lava,” but in the dark.
“It is time that we find a way to end this game. We need to turn on the lights and build some walkways over the lava pit,” Peirce said at the SEC “Know Your Custodian” roundtable event on April 25.
The lava is crypto, says Peirce
Peirce explained that SEC registrants are forced to approach crypto-related activities like “the floor is lava,” where the aim is to jump from one piece of furniture to the next without touching the ground, except here, touching crypto directly is the lava.
“A D.C. version of this game is our regulatory approach to crypto assets, and crypto asset custody in particular,” she said.
Peirce said that, much like in the game, firms wanting to engage with crypto must avoid directly holding it due to unclear regulatory rules. “To engage in crypto-related activities, SEC-registrants have had to hop from one poorly illuminated regulatory space to the next, all while ensuring that they never touch any crypto asset,” Peirce said.
Peirce said that investment advisers are often unsure which crypto assets qualify as securities, what entities count as qualified custodians, and whether “exercising staking or voting rights” could trigger custody violations.
“The twist in the regulatory version is that it is largely played in the dark: burning legal lava and no lamps to illuminate the way.”
Peirce also said that a broker or ATS that cannot custody or manage crypto assets will struggle to facilitate trading, making it unlikely for a “robust market” to develop.
Echoing a similar sentiment, SEC Commissioner Mark Uyeda said at the event that as more SEC registrants work with crypto assets, it’s essential that they have access to custodial options that meet legal and regulatory requirements.
Uyeda said the agency should consider letting advisers use “state-chartered limited-purpose trust companies” with the authority to hold crypto assets as qualified custodians.
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Meanwhile, the recently sworn-in chair of the SEC, Paul Atkins, said that he expected “huge benefits” from blockchain technology through efficiency, risk mitigation, transparency, and cutting costs.
He reiterated that among his goals at the SEC would be to facilitate “clear regulatory rules of the road” for digital assets, hinting that the agency under former chair Gary Gensler had contributed to market and regulatory uncertainty.
“I look forward to engaging with market participants and working with colleagues in President Trump’s administration and Congress to establish a rational fit-for-purpose framework for crypto assets,” said Atkins.
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Emmanuel Macron has said France will recognise Palestine as a state later this year.
The French president announced the major change of policy in a letter to the president of the Palestinian Authority, Mahmoud Abbas, which Mr Macron also published online on Thursday evening.
The French leader said he will make the formal announcement at the UN General Assembly, being held in September.
France will become the first G7 member to recognise a Palestinian state.
In his post explaining the decision, Mr Macron called for an immediate ceasefire in Gaza, the release of the hostages and for much more humanitarian aid to reach those in the territory.
But Israel’s defence minister has called the French decision “a disgrace and a surrender to terrorism”.
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Sky’s international correspondent John Sparks, reports on the children in Gaza who are experiencing malnutrition, one child wishes for ‘life to go back to how it was.’
The move heaps pressure on France’s allies such as the UK, and Sir Keir Starmer insisted tonight that he is “clear that statehood is the inalienable right of the Palestinian people”.
But the prime minister has resisted calls from within his own party to recognise Palestine immediately, as he views this as part of the peace process in Gaza.
Currently, half of the G20 recognise Palestine as a state, while nations including the UK, US, Germany and others do not.
But pressure has been growing on Sir Keir to change course, with senior Labour figures including the Mayor of London Sir Sadiq Khan publicly calling for a change in government policy.
Starmer: ‘We are witnessing a humanitarian catastrophe’
Just hours before Mr Macron’s announcement, Sir Keir said he would be holding an “emergency call” with the leaders of France and Germany over what he termed the “humanitarian catastrophe” happening in Gaza.
In some of the firmest language from the government yet, Sir Keir said that “the suffering and starvation unfolding in Gaza is unspeakable and indefensible”.
He went on to say that it has been “grave for some time”, but that it has now “reached new depths and continues to worsen”.
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The PM says that
Sir Keir said: “I will hold an emergency call with E3 partners tomorrow, where we will discuss what we can do urgently to stop the killing and get people the food they desperately need while pulling together all the steps necessary to build a lasting peace.”
The PM added that “we all agree” on the need for Israel to “change course and allow aid that is desperately needed to enter Gaza without delay”.
He wrote: “It is hard to see a hopeful future in such dark times. But I must reiterate my call for all sides to engage in good faith, and at pace, to bring about an immediate ceasefire and for Hamas to unconditionally release all hostages.”
Across the globe, more than 140 countries recognise Palestine as a state.
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