If ever there was a canary in the regulatory coal mine, it’s Crypto Mom. U.S. SEC Commissioner Hester Peirce, who is affectionately known as Crypto Mom by the community, admitted that regulators, who have so far denied a bitcoin ETF, have missed the mark on crypto.

In a sit-down interview with crypto and blockchain journalist Laura Shin, Peirce appears to suggest that crypto’s potential has been stifled by a narrow-minded SEC that refuses to embrace change. She places the fate of a bitcoin ETF in the hands of the market, however, though Crypto Mom is quick to point out where regulation has failed.

“In general, the agency hasn’t been great on innovation and so this is sort of the natural area for me to be looking at because this is where innovation and the SEC are meeting.” *

Indeed, Peirce serves as a bridge of sorts between blockchain innovators and regulators, one whose voice validates the frustration felt by much of the industry. She said in response to an audience question about U.S. regulators and the New York Department of Financial Services:

“[Regulators are] dismissive of this space in a way that misses the point.”

That doesn’t mean crypto is off the hook. Crypto Mom points to the U.S. capital markets, whose very strength is thanks in part to regulation. The winning point went to crypto when she added that “regulators must still look at new spaces.”

Semi-Punt on bitcoin ETF timing

No doubt, the question on everyone’s mind in the audience was on the future of a bitcoin ETF. Peirce semi-punted here, refusing to predict whether the SEC would approve a bitcoin ETF in 2019. Crypto Mom famously dissented from her peers on the Winklevoss ETF decision, which was ultimately rejected. She remains the only grown up in the room on the topic.

“I don’t know whether this product or another exchange-traded product would be good for investors, but I think investors can make that decision better than I can. Sometimes things that [require fighting for] make it to market and they fall, and that’s the way it is, but that’s the market’s decision”

Having said that, bitcoin ETF applicants can appeal a rejection at the SEC staff level or a commissioner can overrule the early denial.

A previous interview between Crypto Mom and the Chamber of Digital Commerce

ICOs

On ICOs, the SEC sounds a lot like the IRS, with Peirce saying: “It’s better that you reach out to them than we [come to you].”

It works in favor of a project when there’s no centralized point of marketing to investors. Without what Cryp0to Mom describes as a monopoly on information, a project “looks a lot less centralized, it looks a lot less like a securities offering.” When in doubt, shout it out.

“You’ve got to be aware that you could trip [securities rules] and end up in a not a good place,” she said.

This is especially good advice in light of “dated” regulator guidance such as the Howey Test that blockchain founders must use.

Meanwhile, SEC officials are still hammering away at clear regulatory guidance on ICOs, an issue that has had them stumped for a while.

*Peirce’s direct quotes are courtesy of social media updates of the event.