Securities and Exchange Commission (SEC) commissioner Hester Peirce has expressed her disagreement with bailing out crypto companies in times of market turmoil, despite being one of the biggest crypto supporters. She believes that the industry can grow stronger from the recent crash, Forbes informs.
Peirce is of the opinion that we need to “let these things play out,” and allow strong companies that have invested wisely to recover, even if, on the other hand, it could liquidate those that were relying on leverage too heavily. She said:
“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. 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 not want to use that authority, we really need to let these things play out.”
On the other hand, FTX and Alameda Research founder Sam Bankman-Fried disagrees with this approach. On his Twitter account, he announced that FTX would provide a $250 million injection to BlockFi in the spirit of supporting crypto companies in times of trouble. Several other high-profile investors have supported this move, among others Anthony Scaramucci, the founder of SkyBridge Capital.
However, Peirce argues that the current market situation could prove to be a valuable lesson and an insight into how this particular market works under pressure: “It's a moment, not only for market participants to learn, but it's also for regulators to learn so that we can have a better sense of how the market operates.”
At the time of writing, Bitcoin is still struggling at $20,278.42 with the rest of the cryptocurrencies not faring much better. Some expect the current situation to pose as a correction followed by a massive upswing, while others are worried about a further downward trajectory.
