U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce likened the current regulatory environment for crypto firms to playing the children’s game “the floor is lava”—but in total darkness. Speaking at the SEC’s “Know Your Custodian” roundtable event on April 25, Peirce, who also heads the agency’s crypto task force, said it is time to bring clarity and structure to the space. “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 further added. Peirce on Unclear Regulatory Guidelines In her remarks, Peirce explained that SEC-registered firms are effectively forced to avoid direct contact with crypto assets because of unclear regulatory guidance. Much like the game where players must avoid touching the ground, firms must “hop from one poorly illuminated regulatory space to the next,” she said, without directly holding crypto assets. The confusion is particularly acute for investment advisers, who often struggle to determine which crypto assets qualify as securities , which custodians are deemed qualified, and whether engaging in staking or voting could trigger 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 noted. She added that the lack of clear rules prevents brokers and alternative trading systems (ATS) from managing crypto assets efficiently, making it difficult for a robust market to develop in the United States. Here’s What Others Exec Believe Echoing her concerns, SEC Commissioner Mark Uyeda stressed that financial firms working with crypto must have access to qualified custodial services that meet legal standards. Uyeda also suggested that allowing advisers to use state-chartered, limited-purpose trust companies for crypto custody could be a step in the right direction. Meanwhile, newly appointed SEC Chair Paul Atkins expressed optimism about blockchain’s future, noting its potential for improving efficiency, transparency, risk management, and cost savings across financial markets. Atkins emphasized that one of his top priorities would be to create “clear regulatory rules of the road” for digital assets, acknowledging that regulatory uncertainty under the previous administration had been a major obstacle. “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,” Atkins said. The post Hester Peirce Says Crypto Firms Are Playing “The Floor Is Lava” Under Current Rules appeared first on TheCoinrise.com .
