Latest / The Paul Barron Crypto Show / SEC Commissioner Hester Peirce INTERVIEW!🚨Crypto Task Force Unleashed!🔥

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SEC Commissioner Hester Peirce INTERVIEW!🚨Crypto Task Force Unleashed!🔥 · The Paul Barron Crypto Show

0:06
Speaker 1: Today let's jump into Crypto Task Force updates. Of course,
0:09
Speaker 1: I'm filming this remotely today, so hopefully i'll be back
0:12
Speaker 1: in studio soon. But we've got a special guest that's
0:14
Speaker 1: going to be a great one. My name is Paul Barren.
0:16
Speaker 1: Welcome back into the show. Let's just get into it.
0:18
Speaker 1: Of course, with Commissioner Purse. We have not had her
0:21
Speaker 1: on the show, so first of all, welcome in to
0:24
Speaker 1: the show.
0:25
Speaker 2: We appreciate it.
0:26
Speaker 3: Well, thank you, Paul, It's great to be here.
0:27
Speaker 4: I do want to start with my disclaimer, which is
0:30
Speaker 4: that my views are my own views as a commissioner,
0:32
Speaker 4: not necessarily those of the SEC or my fellow commissioners.
0:36
Speaker 2: Understood completely.
0:37
Speaker 1: Listen, we have a lot of people that follow this
0:40
Speaker 1: channel in our show. Of course, some of the biggest
0:43
Speaker 1: questions I think in the industry when it comes to
0:46
Speaker 1: investing all circle around the SEC and what's happening with
0:50
Speaker 1: crypto and blockchain as a whole. So obviously you leading
0:54
Speaker 1: the Crypto Task Force, give us an update of where
0:57
Speaker 1: you guys are right now.
0:59
Speaker 4: Well, we've had a an eventful i think six months
1:02
Speaker 4: since we started in January, and the goal really when
1:06
Speaker 4: we started out was to do some of the things
1:09
Speaker 4: that I had been asking for the agency to do
1:11
Speaker 4: for a long time, which is really to take a
1:15
Speaker 4: more proactive approach to trying to identify areas where the
1:20
Speaker 4: securities laws do apply, and then working with people to
1:24
Speaker 4: get to a place where they could do the things
1:27
Speaker 4: they were trying to do in a way that was
1:29
Speaker 4: commercially viable but also that was legal under the securities laws.
1:33
Speaker 4: And so really putting some meat behind the statement of
1:38
Speaker 4: come in and register, really enabling people to come.
1:41
Speaker 3: In and register.
1:42
Speaker 4: Now, we have a lot of work to do in
1:44
Speaker 4: some of the preliminary things that we've done really have
1:46
Speaker 4: been just that preliminary. So I put out a long
1:49
Speaker 4: list of questions about fifty questions. We've been getting lots
1:53
Speaker 4: of great written responses to those questions and working my
1:57
Speaker 4: way through through reading those, and others on the task
2:00
Speaker 4: force and on the staff of the sec are reading
2:03
Speaker 4: those as well. And then we're meeting with lots of
2:05
Speaker 4: people and we've had some we had a series of
2:08
Speaker 4: five formal roundtables where we brought people in with different
2:13
Speaker 4: perspectives to talk about these issues.
2:15
Speaker 3: And the goal then is to move on to.
2:18
Speaker 4: Rule making and that will take a little time notice
2:22
Speaker 4: in comment rule making, but we've we've also provided some
2:25
Speaker 4: statements that worked with the staff to provide some statements
2:27
Speaker 4: around some things that are not within the ambit of.
2:30
Speaker 3: The securities laws.
2:31
Speaker 4: Okay, so you know you might have seen meme coin staking, mining,
2:36
Speaker 4: those kinds of things.
2:37
Speaker 3: So that's that's what we've been up to.
2:39
Speaker 1: Is there any one particular area that seems to show
2:43
Speaker 1: the most efforts or are you guys trying it because
2:46
Speaker 1: it seems like you had so much to do? Is
2:48
Speaker 1: where do how do you pick what comes first or
2:50
Speaker 1: what you really focus on?
2:52
Speaker 4: Well, prioritization is difficult, although we have a lot of people,
2:56
Speaker 4: so the task force itself is not big, but we
2:59
Speaker 4: have people throughout the agency who are working on these
3:01
Speaker 4: issues and have been working very hard on these issues.
3:04
Speaker 4: So within our different divisions and so some of the prioritization,
3:10
Speaker 4: you know, we can do all things at once to
3:12
Speaker 4: some degree, because we do have different divisions working on
3:16
Speaker 4: different things. That said, we've gotten a lot of requests
3:20
Speaker 4: from the outside for no action letters or exemptive relief
3:24
Speaker 4: and those kinds of things do require us to do
3:27
Speaker 4: some staging and prioritization I wish we could do it
3:30
Speaker 4: all at once. We can't, and so that's the area
3:33
Speaker 4: where we're having to make some difficult calls about where
3:36
Speaker 4: to spend our time.
3:37
Speaker 1: Yeah, yeah, I can imagine. Well, I mean, this has
3:39
Speaker 1: been a lot of pent up demand. There's also been
3:41
Speaker 1: a lot of pent up questions and you know, everybody
3:43
Speaker 1: trying to figure out what to do. So obviously this
3:45
Speaker 1: is this first of all, is congratulations.
3:48
Speaker 2: To you guys. This is a huge step forward, I
3:50
Speaker 2: think in the industry. So we appreciate all the work.
3:53
Speaker 1: Let's get into the rise of the situation that is
3:56
Speaker 1: starting to bruin that is twenty four to seven three
3:59
Speaker 1: sixty five trade, the progress around some of the regulatory
4:02
Speaker 1: hurdles that will be faced in this What kind of
4:05
Speaker 1: hurdles are you facing right now when it comes to
4:08
Speaker 1: this particular.
4:09
Speaker 4: Area twenty four to seven trading? Is it's not surprising
4:12
Speaker 4: that that's where we're going because everything else we do
4:16
Speaker 4: in our lives you can do, you can do at anytime,
4:18
Speaker 4: you know. We that's just how we kind of live
4:20
Speaker 4: as a society now twenty four to seven. So I
4:23
Speaker 4: think it's it's understandable that it's coming to the securities markets,
4:28
Speaker 4: we do have some work to do and trying to
4:31
Speaker 4: figure out how some of the legacy systems interact because
4:35
Speaker 4: they're not designed to be on all the time, and
4:38
Speaker 4: so trying to understand and figure out where the operational
4:44
Speaker 4: difficulties might be is something that we're working through. And
4:47
Speaker 4: you know, I think a lot of people on the
4:49
Speaker 4: outside are thinking about these things too, and so we'll
4:51
Speaker 4: get some good suggestions from outside.
4:54
Speaker 2: Yeah.
4:54
Speaker 1: Well, listen, this is going to be one of the
4:56
Speaker 1: hottest topics probably for some time right now because there's
4:59
Speaker 1: so many any companies within Wall Street. Internationally, what we're
5:03
Speaker 1: starting to see in the European Union obviously with MIKA
5:06
Speaker 1: starting to go in with their regulations, this is now
5:09
Speaker 1: putting a little bit.
5:09
Speaker 2: Of pressure on the entire investing community.
5:12
Speaker 1: Let's talk about private equity because this is another area
5:15
Speaker 1: that we think is going to explode tokenization, especially in
5:19
Speaker 1: the private equity space. You look at the growth that
5:22
Speaker 1: we've seen, these are just in terms of the number
5:24
Speaker 1: of funds that have been out there. How much is
5:27
Speaker 1: going into this space. Talk to me about how this
5:31
Speaker 1: could be unlocked through actions coming out of the.
5:35
Speaker 4: Sec Well, I think tokenization of various things is on
5:39
Speaker 4: the minds of lots of people, you know, whether it's
5:42
Speaker 4: traditional equities being tokenized, or whether it's debt, or whether
5:46
Speaker 4: it's private equity. I mean, people are thinking in lots
5:49
Speaker 4: of ways about how tokenization could be used. And one
5:53
Speaker 4: thing is it could make the whole process of issuing
5:56
Speaker 4: assets more efficient, right, It could make the process of
6:00
Speaker 4: transferring them from one to another more efficient, could make
6:03
Speaker 4: it easier to borrow against assets if they're on chain,
6:07
Speaker 4: and so I think that's what some people are thinking of.
6:09
Speaker 4: I do caution people to not assume that merely tokenizing
6:13
Speaker 4: something will create liquidity for it. You know, there are
6:17
Speaker 4: a lot of factors that go into that. And so
6:20
Speaker 4: I think, though you know, some people are hopeful that
6:24
Speaker 4: you could take something like a private equity fund and
6:26
Speaker 4: you can tokenize it and you can give more people
6:30
Speaker 4: access to it, we still have our credited investor rules
6:32
Speaker 4: and those will you know, they'll apply no matter if
6:36
Speaker 4: it's a tokenized fund or not. So I think that's
6:40
Speaker 4: something that people should be They should they should realize
6:44
Speaker 4: that just because you tokenize something, it does not mean
6:48
Speaker 4: that the rules change.
6:49
Speaker 1: When you look at tokenizing private equity and you think
6:52
Speaker 1: about the almost like the geographical locations of where a
6:58
Speaker 1: lot of these funds are being raised. They are seeming
7:01
Speaker 1: to center around certain parts of the United States. With
7:05
Speaker 1: that being the case, you look at the potential where
7:09
Speaker 1: maybe investors are centered in one space. What is the
7:13
Speaker 1: way that we could see this much more equal, especially
7:17
Speaker 1: here in the United States it seems like, you know,
7:19
Speaker 1: it's the east.
7:19
Speaker 2: Coast, west coast, southeast.
7:22
Speaker 1: Is there any opportunities there in the future for kind
7:25
Speaker 1: of leveling the playing field, especially for I.
7:27
Speaker 3: Certainly hope so.
7:28
Speaker 4: I mean that's one of the reasons that I wanted
7:32
Speaker 4: to be on the commission right to try to think
7:35
Speaker 4: about how can we make sure that people all over
7:38
Speaker 4: the country are looking at our US capital markets as
7:41
Speaker 4: being a treasure that they that they can actually use,
7:45
Speaker 4: whether that's as investors or as founders of companies looking
7:50
Speaker 4: for capital. And so that has been one of the
7:52
Speaker 4: very difficult things to marry the people who have the
7:56
Speaker 4: ideas with the people.
7:57
Speaker 3: Who have the money.
7:59
Speaker 4: And and I think that tokenization and other mechanisms for
8:04
Speaker 4: broadening and making it making the process more seamless, could
8:08
Speaker 4: be helpful. But I think it really is a question
8:13
Speaker 4: of helping people build networks where they can where they
8:17
Speaker 4: can get funds from those networks. And you know, it's
8:20
Speaker 4: great if you grow up in a rich family or
8:23
Speaker 4: rich neighborhood and have rich friends, or go to a
8:25
Speaker 4: school where all the people who graduate are rich. But
8:28
Speaker 4: it's for other people who just are brilliant and have
8:31
Speaker 4: great ideas but don't have those networks that we really
8:34
Speaker 4: have to look for ways to unlock capital for them.
8:37
Speaker 1: Well, you just said something I think that a lot
8:38
Speaker 1: of people would overlook, and that is the capital markets
8:43
Speaker 1: here in the US are a treasure. This is one
8:45
Speaker 1: of the best, well it is the best by far
8:48
Speaker 1: market in the world. And for us to be able
8:51
Speaker 1: to kind of elevate it to the point where, you know,
8:53
Speaker 1: all walks of life, all sorts of ideas can kind
8:56
Speaker 1: of get measured because listen, I grew.
8:58
Speaker 2: Up in Silicon Valley. I worked in Silicon Valley for
9:00
Speaker 2: a long time.
9:01
Speaker 1: I know what it was like in the early days
9:04
Speaker 1: of the birth of so much technology. And I do hope,
9:08
Speaker 1: you know, with all you guys' efforts, that this can
9:10
Speaker 1: kind of change, because it has been kind of one sided,
9:12
Speaker 1: you know, unfortunately.
9:13
Speaker 3: Yeah, and I mean the pandemic.
9:15
Speaker 4: You know, with all the bad things the pandemic brought,
9:17
Speaker 4: one thing that it did I think make people realize
9:20
Speaker 4: is that because everyone was connecting with people, even local
9:23
Speaker 4: people via Zoom, they started to realize, wow, you know,
9:28
Speaker 4: maybe I can look beyond my local area for projects
9:31
Speaker 4: for companies to invest in. And so I think that
9:34
Speaker 4: was positive, but it's we still have a lot more
9:37
Speaker 4: work to.
9:37
Speaker 3: Do on that front.
9:38
Speaker 2: Yeah.
9:39
Speaker 1: And the blockchain, of course makes it even more global,
9:42
Speaker 1: you know, because we have you know, companies that are
9:43
Speaker 1: being developed here in the US. They're you know, they're
9:45
Speaker 1: pulling in investors from all over the world as well
9:48
Speaker 1: as employees.
9:49
Speaker 4: You know.
9:49
Speaker 1: So it is a different kind of of market and
9:52
Speaker 1: definitely a different kind of workspace right now in terms
9:54
Speaker 1: of the workspace of idea generation, which is where capital
9:58
Speaker 1: needs to be deployed.
10:00
Speaker 4: I mean, of course, another just to go back to
10:04
Speaker 4: the underlying problem. I mean, I do think the accredited
10:07
Speaker 4: investor definition is part of the problem also because it
10:12
Speaker 4: is very much calibrated for people who are working and
10:15
Speaker 4: living on the coasts. And I'm from Cleveland, and I
10:18
Speaker 4: know that people in Cleveland don't make the same kind
10:20
Speaker 4: of salaries as people on the on the coasts do,
10:23
Speaker 4: and so I find the accredited investor just that having
10:28
Speaker 4: that thing in place based on wealth and income is
10:32
Speaker 4: problematic in itself, but it is especially problematic when you
10:36
Speaker 4: get to parts of the country where salaries tend to
10:39
Speaker 4: be lower.
10:39
Speaker 2: No doubt.
10:40
Speaker 1: Let's talk about other challenges that the industry has faced.
10:44
Speaker 1: One that goes back, I think and is at the
10:46
Speaker 1: heart of where most of this young or youthful investor
10:51
Speaker 1: strategies have started to build. Started at a little company
10:55
Speaker 1: called game Stop, and you know, five years later, here
10:58
Speaker 1: we are, and now maybe tokenization makes a strong case
11:03
Speaker 1: for this because of the problems that happened during that
11:05
Speaker 1: Do you feel that that could be a fix for
11:09
Speaker 1: those kinds of issues in the future.
11:11
Speaker 4: I mean, I think it's an interesting thought to see
11:14
Speaker 4: what tokenizing stock will lead to, and it may be
11:20
Speaker 4: able to address some of these concerns. I think there's
11:23
Speaker 4: a lot of work that needs to be done around tokenizing,
11:25
Speaker 4: and that's why I'm happy to see that people are
11:27
Speaker 4: experimenting with it.
11:29
Speaker 3: But it does raise the.
11:31
Speaker 4: Possibility that it makes it easier to track a share,
11:36
Speaker 4: to figure out whether a share has been borrowed, and
11:41
Speaker 4: so I think there is some potential there, but there's
11:44
Speaker 4: just a lot of work that has to be done,
11:46
Speaker 4: and there are a lot of different models of tokenization
11:49
Speaker 4: that are being experimented with, and so we'll.
11:51
Speaker 3: Just have to see how that shakes out.
11:54
Speaker 4: I've also wondered whether tokenization could be helpful in enabling
11:59
Speaker 4: companies to communicate with their shareholders more easily than they're
12:04
Speaker 4: able to now, and maybe can help with some issues
12:08
Speaker 4: around voting as well. So I think there's just a
12:10
Speaker 4: lot to be investigated there.
12:13
Speaker 1: Well is if you look at some of the I
12:15
Speaker 1: won't say task but at least some of the early
12:18
Speaker 1: ideas that are coming out of the industry, Is there
12:20
Speaker 1: anything that you gravitate to around a model that you
12:25
Speaker 1: feel could work.
12:26
Speaker 4: What I'm really trying to do now, and I think
12:28
Speaker 4: what we're trying to do at the Task Force is
12:30
Speaker 4: not try to have the government pick the model that's going.
12:33
Speaker 3: To work, allow those models.
12:36
Speaker 4: To be organically tested by the market. I expect that
12:40
Speaker 4: we'll see gravitation toward a particular model, but I really
12:44
Speaker 4: want that to be market driven. I'm a believer that
12:47
Speaker 4: regulators typically aren't the best ones to make the decision
12:50
Speaker 4: of how it should be done.
12:51
Speaker 1: All Right, we're going to get into a topic that's
12:53
Speaker 1: very near and dear to our audience's hearts, and that
12:56
Speaker 1: is around fee sharing tokens. So this could be meme coins,
13:01
Speaker 1: this could be traditional blue chips, everything that's out there,
13:04
Speaker 1: you know, earning yield or giving some sort of thing,
13:07
Speaker 1: and maybe people many people would say that, hey, this
13:10
Speaker 1: is if you you know, if you're getting any kind
13:12
Speaker 1: of payment from that token, then it's potential a security.
13:15
Speaker 1: The argument, of course, gets into things like loyalty, rewards,
13:19
Speaker 1: all sorts of gambits out there that are in modern
13:22
Speaker 1: day society already that are paying you rewards or you're
13:26
Speaker 1: getting some sort of value in return. Are they are
13:29
Speaker 1: meme coins considered a security?
13:31
Speaker 4: Well, we put out this the Division of Corporation Finance
13:34
Speaker 4: put out a statement saying that meme coins, you know, again,
13:38
Speaker 4: facts and circumstances matter, but but typically the meme coins
13:41
Speaker 4: that we've seen have not been securities. Now you can
13:45
Speaker 4: take something that's not a security and you can offer
13:48
Speaker 4: it in a way that makes that a securities offering,
13:51
Speaker 4: in which case you've got to comply with our rules.
13:54
Speaker 4: But that's true of any kind of object, whether it's
13:57
Speaker 4: a meme coin or something else. So you know, you
14:00
Speaker 4: do have to look at facts and circumstances.
14:01
Speaker 1: Well, I think this is going to be one that
14:03
Speaker 1: is going to be interesting to watch because there's so
14:05
Speaker 1: many companies that are now trying to figure out how
14:07
Speaker 1: to utilize the blockchain in terms of loyalty, you know,
14:11
Speaker 1: so whether you look at major corporations, McDonald's has started
14:15
Speaker 1: to go in this direction. Starbucks of course attempted this
14:17
Speaker 1: with their program launch a few years ago with Odyssey
14:21
Speaker 1: and their NFT model, but again it was it was
14:24
Speaker 1: yielding out revenue and eventually it created some sort of
14:28
Speaker 1: value that you know, holders would have.
14:30
Speaker 2: So I'm very intrigued this is developed, and I mean.
14:33
Speaker 4: Again I think it depends how something like that is designed.
14:37
Speaker 4: And I do encourage people who have ideas for you know,
14:41
Speaker 4: companies that are thinking about a program that they'd like
14:43
Speaker 4: to develop and there if they have questions around whether
14:46
Speaker 4: that might trip the securities laws, please do come and
14:49
Speaker 4: talk to us. I mean, we are looking for ways
14:52
Speaker 4: that we can provide guidance and help people think through
14:54
Speaker 4: these issues. I uh, you know, a few years ago
14:58
Speaker 4: wrote a descent. A couple thessents actually related to NFT
15:02
Speaker 4: projects where I thought that we were not applying the
15:05
Speaker 4: securities laws the way that we should have. And I
15:08
Speaker 4: think it really is exciting to think about how these
15:12
Speaker 4: how different companies could use NFTs to build fan bases
15:19
Speaker 4: and cultivate their relationships with their customers or you know,
15:23
Speaker 4: to to There are lots of different potential uses, I think,
15:28
Speaker 4: and I am excited to see those. And so again,
15:32
Speaker 4: if people do want to come talk to us about those,
15:34
Speaker 4: we're open to having those conversations.
15:37
Speaker 2: Well it's good to hear. I want to talk.
15:39
Speaker 1: Actually, I've got a clip I want to play for you.
15:41
Speaker 1: It's around credit credit investors, and I want to get
15:44
Speaker 1: your opinion on this. Give us kind of a framework
15:47
Speaker 1: because this is where it gets a little bit interesting
15:49
Speaker 1: for the future of finance.
15:50
Speaker 2: Let's go to that clip.
15:51
Speaker 5: You're a startup and you don't want to make any disclosure. Well,
15:55
Speaker 5: maybe we put like a red skull and crossbones when
15:59
Speaker 5: we're sort of like presenting that asset to customers.
16:02
Speaker 6: Equity crowdfunding, the idea was that you could go and
16:06
Speaker 6: create kind of that skull and crossbones level that Lad
16:09
Speaker 6: is talking about there. But you can't get those on
16:12
Speaker 6: a standard exchange. You have to go to a specific
16:15
Speaker 6: place to find them. And if we were able to
16:18
Speaker 6: have a more kind of unified system, and is the
16:22
Speaker 6: path of entrepreneurs to be able to raise the money.
16:25
Speaker 6: Being able to do a stock offering as quickly as
16:27
Speaker 6: a meme coin is a wonderful thing. You're probably limited
16:31
Speaker 6: to offering your token to people who make over two
16:33
Speaker 6: hundred thousand dollars a year. That doesn't work. Ten to
16:36
Speaker 6: twenty percent of the population now qualify to be able
16:40
Speaker 6: to make those investments. But that means most Americans can't
16:44
Speaker 6: invest in private investments, all right.
16:47
Speaker 2: A credit investor. As you can see, that was Michell.
16:50
Speaker 1: She's talking about that very issue that has been raised
16:54
Speaker 1: for quite some time, and this has been a problem
16:56
Speaker 1: in the industry. Where do you think this is going?
16:59
Speaker 1: How are you guys going to potentially address this challenge?
17:02
Speaker 4: Well? I do take a position that, as I said before,
17:07
Speaker 4: that accredited investor a threshold that is based on wealth
17:11
Speaker 4: and income is inherently problematic from an American liberty perspective.
17:17
Speaker 3: But I think that you.
17:19
Speaker 4: Know, given Washington realities and given the realities of how
17:22
Speaker 4: that accredited investor test came to be in the first place.
17:26
Speaker 4: I think what is more likely is that we'll continue
17:29
Speaker 4: to experiment with ways to expand the methods by which
17:34
Speaker 4: someone can become an accredited investor and then have access
17:37
Speaker 4: to more investment opportunities. I do think that if I
17:42
Speaker 4: were trying to design this from scratch, what I would
17:45
Speaker 4: do is I would say, look, you can have a
17:47
Speaker 4: you can have public markets, and people generally will invest
17:50
Speaker 4: in public markets, but anyone is free to opt into
17:53
Speaker 4: private markets with the understanding that they're not going to
17:58
Speaker 4: get the same set of protections that they do in
18:00
Speaker 4: the public markets. I think the benefit of having private
18:04
Speaker 4: markets in public markets side by side is that it
18:06
Speaker 4: can show if there's something wrong in the public markets,
18:09
Speaker 4: and I think that we are seeing signs that there's
18:11
Speaker 4: something wrong now in the public markets. We're not seeing
18:14
Speaker 4: companies decide to go public early in their lives, and
18:19
Speaker 4: there are a lot of reasons for that. We don't
18:21
Speaker 4: have time to talk about all of them here, but
18:24
Speaker 4: one of the reasons is that I don't think the
18:26
Speaker 4: SEC has gotten the regulatory balance right on public companies,
18:31
Speaker 4: and that's something that I'm really enthusiastic about seeing the
18:35
Speaker 4: SEC under chairman at can really tackle and work.
18:38
Speaker 1: On Okay, well, we definitely want to have you back
18:41
Speaker 1: on that topic because I think that's a huge topic
18:43
Speaker 1: to address because there's a lot of to your point,
18:46
Speaker 1: both public and private. We get this a lot, mainly
18:49
Speaker 1: because most of the companies that are in the blockchain
18:52
Speaker 1: industry have chosen to stay private and in some cases international,
18:57
Speaker 1: mostly because they've been pushed off the United States because
18:59
Speaker 1: of the regular constrainment. But that's changing now as we
19:03
Speaker 1: move forward. Now it feels like it's a new dawn.
19:05
Speaker 1: So I'm very excited about that. With that in mind,
19:09
Speaker 1: let's talk about tech stack for the SEC, because this
19:13
Speaker 1: was a recent issue that occurred.
19:14
Speaker 2: You guys put out a bulletin. We saw an immediate impact.
19:18
Speaker 1: Ons bet, which is a company out there curplink gaming
19:21
Speaker 1: real time notifications of what's happening in the market. What
19:25
Speaker 1: are you guys doing to deal with that issue right
19:29
Speaker 1: now in terms of the tech stack that you guys
19:31
Speaker 1: are using.
19:32
Speaker 4: Yeah, I mean, the SEC is constantly investing in its technology,
19:37
Speaker 4: and I think one of the reasons it's really important
19:39
Speaker 4: is because we do have the Edgar system which is
19:42
Speaker 4: where people are getting their information, and so we need
19:47
Speaker 4: to make sure that that is working as well as
19:50
Speaker 4: it can. We were talking about twenty four x seven
19:53
Speaker 4: trading earlier, and again that does raise some new challenges.
19:58
Speaker 4: Companies usually wait to after the close of markets to
20:01
Speaker 4: make big announcements. Now, what's going to happen when their
20:04
Speaker 4: markets are always are always trading. So I think we've
20:07
Speaker 4: got a lot of issues to think about. Good technology
20:10
Speaker 4: is very important at the SEC. Trying to make sure
20:13
Speaker 4: that we're only using Edgar for the purposes it should
20:16
Speaker 4: be used for, which is you know, around these these
20:19
Speaker 4: disclosure issues. Not we also sometimes collect information that's not
20:23
Speaker 4: intended for public disclosure through Edgar. That doesn't make a
20:26
Speaker 4: lot of sense to me. So if we can focus
20:29
Speaker 4: Edgar on what it's meant for and we can invest
20:32
Speaker 4: what we need to to make sure that it's it's
20:35
Speaker 4: top notch, that's I think what we should do.
20:38
Speaker 2: What about real time alerts?
20:39
Speaker 1: You think about cross I'm thinking cross chain when you
20:42
Speaker 1: get into things that are happening across all these different
20:45
Speaker 1: blockchains that could get into you know, this is an
20:48
Speaker 1: example we're showing on screen right there with metal Mass
20:50
Speaker 1: using kind of a push concept and notifications to investors.
20:55
Speaker 1: There's a lot of capability that is built into these
20:58
Speaker 1: systems right now, what out doing something like that?
21:01
Speaker 4: Well, I think that that's some of the interesting promise
21:05
Speaker 4: of this new technologies that I do think it allows
21:08
Speaker 4: for interesting new ways for companies to communicate with shareholders. Now,
21:13
Speaker 4: there's a lot of securities law out there that we
21:16
Speaker 4: have to think about in terms of how that matches
21:19
Speaker 4: up with the requirements that public companies have, but the
21:23
Speaker 4: potential is really there, I agree, you know, to get
21:25
Speaker 4: information to people more quickly, and I think that's one
21:30
Speaker 4: of the areas where sometimes we think about new technology
21:33
Speaker 4: and we think about it in terms of all the
21:36
Speaker 4: problems it's going to create for regulators to deal with.
21:39
Speaker 4: But there are also some real potential benefits that come
21:44
Speaker 4: with new technology that can enable it enable us to
21:49
Speaker 4: achieve our regulatory objectives more efficiently and effectively.
21:53
Speaker 1: This tech, you know, when you look at people who
21:56
Speaker 1: have been in the technology industry, and I talk to
21:58
Speaker 1: so many that you know, kind of burn than the
22:00
Speaker 1: birth of the Internet, and every one of them I've
22:03
Speaker 1: all said, this is a major technology leap forward.
22:07
Speaker 2: There's a lot of opportunity here.
22:09
Speaker 1: So hopefully you guys will be right there at the
22:11
Speaker 1: you know, the cutting edge of where all this is going.
22:15
Speaker 4: Well, you leaders are usually not at the cutting edge.
22:17
Speaker 4: I mean, I'm just going to level fut here a
22:19
Speaker 4: little bit. But this is why it's so important for
22:23
Speaker 4: us to keep the conversation with the outside going, because
22:25
Speaker 4: we're going to you know, we need to be tracking
22:27
Speaker 4: what's happening in the market. We need to be talking
22:29
Speaker 4: to those technologists who can help us think about how
22:33
Speaker 4: we can do our jobs better too.
22:34
Speaker 1: Hester do you think Congress should just ban KYC, especially
22:40
Speaker 1: where we are right now for investors. I mean, this
22:43
Speaker 1: is almost a privacy issue. There's all sorts of things
22:47
Speaker 1: that are kind of coming into this. What are your
22:49
Speaker 1: thoughts on that.
22:50
Speaker 4: I'm glad you're raising the issue because I think we
22:53
Speaker 4: don't spend enough time thinking about financial privacy and the
22:56
Speaker 4: importance of a financial privacy to Americans. I think we've
22:59
Speaker 4: seen it a lot of a lot of ground there
23:02
Speaker 4: and sort of treated it as if it's not important.
23:05
Speaker 4: I would like us to take seriously the privacy concerns
23:09
Speaker 4: that Americans have. You know, it's always a balance, right
23:13
Speaker 4: and and the KYC rules are in place for a reason.
23:17
Speaker 4: You want to make sure that bad people aren't using
23:20
Speaker 4: the financial system to do bad things. And so I
23:24
Speaker 4: think that's the origin of some of these requirements. But
23:28
Speaker 4: I do think it would be worth us as a nation,
23:32
Speaker 4: and this is a good moment to do it, to
23:34
Speaker 4: sit down and take a look at the at all
23:37
Speaker 4: of the financial surveillance tools that are in place and
23:40
Speaker 4: ask are these serving the purpose and if so, are
23:43
Speaker 4: they doing it at.
23:44
Speaker 3: A cost that's too high? And by cost, I.
23:46
Speaker 4: Don't mean don't only mean dollar cost, I also mean
23:49
Speaker 4: cost in terms of privacy.
23:52
Speaker 1: Well, we showed a graphic there on screen just on
23:55
Speaker 1: zkk y C that that could be a technical solution.
23:59
Speaker 1: You know that is actually starts to evolve with the
24:02
Speaker 1: current status of how maybe tokenied securities as well as
24:06
Speaker 1: all these new companies are starting to get into things
24:09
Speaker 1: in terms of how blockchain will be a.
24:11
Speaker 2: Part of this. So maybe that's a solution.
24:13
Speaker 4: A lot of people are talking about that as a
24:15
Speaker 4: potential solution. I you know, I think that we need
24:19
Speaker 4: to still sit down and have conversations about, you know,
24:25
Speaker 4: how would a possible solution like that work, and if so,
24:28
Speaker 4: does it is there still other work that we need
24:31
Speaker 4: to do on modernizing our approach to KYC. Right, but
24:36
Speaker 4: I but I you know, I think a lot of
24:37
Speaker 4: people are very interested in those kinds of solutions.
24:40
Speaker 1: Last question to you is your wish list? What if
24:43
Speaker 1: you look at the task force right now, what is
24:47
Speaker 1: hester Pursu's wish list right now?
24:50
Speaker 4: I mean, my wish the task force is wonderful and
24:52
Speaker 4: the people that we've been dealing with on the outside
24:55
Speaker 4: have been wonderful to work with. My wish list is
24:58
Speaker 4: just that we had more in a day so that
25:01
Speaker 4: we could get more done. It is very difficult to prioritize,
25:05
Speaker 4: and so that would be if I could have anything,
25:08
Speaker 4: it would be it would be more time to get
25:11
Speaker 4: more done.
25:11
Speaker 2: There's only one way to do that. In Silicon Valley.
25:14
Speaker 2: We usually would put beds in our.
25:15
Speaker 4: Room, and I'm not going to suggest.
25:20
Speaker 2: That, not going that far.
25:22
Speaker 1: All right, Well, Esther, it's been great having you on
25:24
Speaker 1: the show today.
25:25
Speaker 2: Thank you so much.
25:26
Speaker 1: Sure you guys, make sure and get in on the
25:29
Speaker 1: Diamond circle. That of course is our own email list.
25:31
Speaker 1: It kind of keeps you up to date with everything
25:33
Speaker 1: that's happening out there in the industry. Obviously, there's a
25:36
Speaker 1: lot going on right now, so join that. We always
25:39
Speaker 1: leave a link down below, and of course you can
25:40
Speaker 1: reach me out there on x at Paul Baron. We'll
25:43
Speaker 1: catch you next time right here on the Paul Baron Show.