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Securities and Exchange Commission (SEC) commissioner Hester Peirce has spoken out against crypto company bailouts, arguing it’s actually better to “let these things play out,” to create a more sustainable industry. 

Peirce, the most pro-crypto commissioner for the United States SEC, told Forbes that the recent crash in crypto, though painful, is separating strong companies from the weak.

“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,” she said.

The commissioner made it clear she did not support bailouts for anyone in the crypto industry, particularly those that mismanaged risk and became over-leveraged.

“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.”

The SEC commissioner’s comments come amid a slew of insolvencies, lay-offs, and hiring freezes within the crypto market.

Crypto whales to the rescue

FTX and Alameda Research founder Sam Bankman-Fried is taking a different approach and has been stepping in to rescue crypto companies struggling due to the market crash.

On Tuesday, Bankman-Fried informed his 706,900 Twitter followers that he and FTX will be injecting $250 million into BlockFi through a revolving credit facility to bolster its balance sheets and strengthen the platform.

It came only days after Alameda Research agreed to give Voyager Digital a 200 million USDC loan and a “revolving line of credit” of 15,000 Bitcoins (BTC), worth $446.3 million at current prices, to be used “if needed to safeguard customer assets.”

Bankman-Fried told NPR on Sunday that this is something he and his companies have done “a number of times in the past” to “stem contagion” amid a cascade of falling crypto companies.

In an interview with Bloomberg on Wednesday, Anthony Scaramucci, founder of SkyBridge Capital called the FTX CEO the “new John Pierpont Morgan,” in reference to the Wall Street financial baron who pledged his own money and convinced others to do the same to shore up the banking system during the 1907 Bankers’ Panic.

“He is bailing out cryptocurrency markets the way the original J.P. Morgan did after the crisis of 1907.”

Peirce argues however that the downturn can be a valuable learning opportunity for market participants and regulators to see how the market moves in times of stress.

Related: Crypto Biz: Crypto carnage pushes Celsius, Three Arrows Capital closer to insolvency, June 9-16

“It is helpful for us to see the points of connection. 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.”

The market turmoil has already badly affected lending platform Celsius Network and crypto-focused hedge fund Three Arrows Capital (3AC), which is facing insolvency after incurring roughly hundreds of millions in liquidations tied to the ongoing collapse of Ether’s price.