Speaker 1: Hey everyone.
Speaker 2: I'm Tony Edward and I'm Amanda Wickcraft and we.
Speaker 3: Are recording at the Salona Policy Institute's summit and joining
Speaker 3: US is Land and Zenda, who is the counsel to
Speaker 3: the Truman and senior advisor for the Crypto Task Force
Speaker 3: at the SEC.
Speaker 1: Landon. Great to have you. Thank you for having me Landon.
Speaker 3: We're recording this on a day the SEC made some
Speaker 3: big announcements. Can you tell us about that and the
Speaker 3: details around it?
Speaker 4: Yeah, I like every SEC employee need to start with
Speaker 4: a kind of a disclaimer, and I thought i'd be
Speaker 4: a little bit educational about it. The Securities and Exchange
Speaker 4: Commission is a commission. It really only acts by the
Speaker 4: votes of the commissioners, and so I am just a
Speaker 4: staffer at the SEC. I do not speak on behalf
Speaker 4: of the commission. But yeah, today, what day is it?
Speaker 1: Monday?
Speaker 4: The Division of Trade Markets issued a statement clarifying certain
Speaker 4: circumstances under which certain wallets, interfaces and front ends that
Speaker 4: trade crypto that if they were to trade token is
Speaker 4: Securities would not have to register as a broker at
Speaker 4: the Securities.
Speaker 1: And Exchange Commission. So it's a big deal.
Speaker 4: It talks about transaction based compensation, which is typically a
Speaker 4: big factor in broker regulation. Even if these interfaces take
Speaker 4: that commission compensation, these things act more like tools for
Speaker 4: the user. They allow them to execute their own decisions
Speaker 4: and make decisions for themselves, and they just relay those
Speaker 4: messages to the blockchain. And so the staff is making
Speaker 4: a big statement that these things don't have to register.
Speaker 3: You are obviously an advisor for the Crypto Task Force.
Speaker 3: Tell us a bit about the task force and a
Speaker 3: mission there.
Speaker 4: Yeah, so the task force is about fifteen staffers at
Speaker 4: the Securities Exchange Commission US, the commission dedicated to creating
Speaker 4: pathways and regulations for crypto at the SEC and up today,
Speaker 4: we've issued a number of statements clarifying security status of
Speaker 4: different things like meme coins, stable coins, proof of work,
Speaker 4: proof of stake. The Commission itself issued an interpretation about
Speaker 4: two weeks ago, trying to provide as much clarity as
Speaker 4: they could as to win tokens our securities and when
Speaker 4: they're not And that was probably one of the biggest
Speaker 4: actions that the staff myself was at least partially helpful
Speaker 4: and working towards. But that was a commission statement, meaning
Speaker 4: that is official Commission position. So win things are securities
Speaker 4: and when they're not, and so it's a really organic group.
Speaker 4: We do not lead the policy that comes from the
Speaker 4: other staff themselves in like this the statement today on interfaces,
Speaker 4: but it's really ground up trying to have the entire
Speaker 4: Commission catch up and get up to speed on crypto
Speaker 4: and establish good regulatory pathways for compliance and for not
Speaker 4: securities registration when appropriate.
Speaker 2: Can you give us a little bit about your background
Speaker 2: and also, while we know your title, what that exactly
Speaker 2: entails at the SEC?
Speaker 4: Yeah, my title is very long. I guess I just
Speaker 4: say I'm a crypto staffer at the SEC. I worked
Speaker 4: for Hester Purce. I also work for the chairman, and
Speaker 4: so it's a kind of dual hat just doing crypto
Speaker 4: policy for them. Prior, I spent six years working for
Speaker 4: Representative Tom Emmer in the House doing a lot of
Speaker 4: his crypto policy. The Blockchain Regulatory Certainty Act is a
Speaker 4: very relevant bill right now in market structure negotiations helped
Speaker 4: drop that for him. Went on to go work at
Speaker 4: the Senate Banking Committee for Senator to me working on crypto,
Speaker 4: doing some early stable coin legislation, and then went to
Speaker 4: Coin Center, which is a think tank in DC dedicated
Speaker 4: to individual liberty, protecting people's rights to write and publish code.
Speaker 4: And from there interacted with Commissioner Pursus Staff and Commissioner Judas,
Speaker 4: the third Commissioner at the SEC, and they brought me
Speaker 4: along to join the task force. And it's a it's
Speaker 4: an amazing time to work at the Commission.
Speaker 1: Yeah, the SEC is.
Speaker 3: Doing an amazing job. There's so many rulemaking and guidelines
Speaker 3: have been put forth. One that Chirp Paul Atkins recently
Speaker 3: you talked about was rage crypto for fundraising. That seems
Speaker 3: he's going to be a pretty impactful one. What can
Speaker 3: you tell us about that?
Speaker 4: Yeah, so we we the Commission issued the interpretation about
Speaker 4: how they look at the Howie test and when certain
Speaker 4: tokens are or on not securities. The next step in
Speaker 4: that process, which the Chairman outlined somewhat is rege crypto
Speaker 4: and it's it's you know, the community can kind of
Speaker 4: think of it as hester Purson's safe harbor, the thing
Speaker 4: she's been talking about for at least five years now.
Speaker 4: How do you how do you do a fundraising in crypto?
Speaker 4: You know, potentially comply with some disclosures. If you're doing
Speaker 4: a securities offering, but at some point, you know, disseminate control, decentralize,
Speaker 4: you know, however, you want to put it such that
Speaker 4: you're no longer in charge of this project, project, you're
Speaker 4: no longer providing the essential managerial efforts that are necessary,
Speaker 4: and and when is a safe harbor appropriate to make
Speaker 4: it clear you're not a security anymore. So the Chairman
Speaker 4: talked about that that is really the only thing that's
Speaker 4: public at this point. So I'd point everyone to his
Speaker 4: his statement. But that's been a you know, a thing
Speaker 4: that the commissioner person has been talking about for years.
Speaker 2: When can we expect some uh, some clarity around or
Speaker 2: guidance on tokenization?
Speaker 4: On tokenization, Yeah, so Congress recently had a hearing on
Speaker 4: tokenization in the House. We are thinking very deeply about tokenization.
Speaker 4: The staff, just like the staff put out a statement
Speaker 4: today on UH interfaces have in George's brokers. The staff
Speaker 4: of several different divisions of the sec put out a
Speaker 4: statement about a month ago talking about the different ways
Speaker 4: to tokenize securities. You could do it from the issue
Speaker 4: where you could have third party issuers. It could carry
Speaker 4: along all the rights like a stock. It could not
Speaker 4: like just give you, you know, a representation of what
Speaker 4: the stock is worth. There's different ways to tokenize that,
Speaker 4: and the staff is thinking very deeply along about how
Speaker 4: how to classify those things when registration is appropriate. There's
Speaker 4: also been a lot of talk about a innovation exemption,
Speaker 4: which is essentially, how do you trade tokenized stocks on
Speaker 4: automated market makers? How do you, you know, use your wallet
Speaker 4: like the staff talked about today, which may not be
Speaker 4: a broker to trade a stock on, you know, an
Speaker 4: automated market maker, something that may not even be an
Speaker 4: exchange itself. You're really just using your wallet to transact
Speaker 4: yourself with someone else. So the innovation exemption will, at
Speaker 4: least as contemplated, will provide an exemption for folks who
Speaker 4: want to create liquidity polls to trade stocks on amms.
Speaker 4: Following that innovation exemption, I think the Commission will think
Speaker 4: a lot about what sort of rules need to change,
Speaker 4: what sort of flexibility should happen to make sure that
Speaker 4: this sort of stock trading and other securities trading can
Speaker 4: happen in the future, and what rules are appropriate, what
Speaker 4: rules should should be tailored for this type of trading.
Speaker 3: And with the rule making that's being put forth, how
Speaker 3: will that fit into CLARITIAC or it doesn't necessarily have
Speaker 3: to go in the CLARIAC claritiac fully it can just
Speaker 3: be referenced as far as the title of the rule
Speaker 3: making is that kind of the dynamic.
Speaker 4: There's a lot of distinctions at the SEC between rule making,
Speaker 4: exemptive authority staff statements. I did my disclaimer at the beginning.
Speaker 4: There's a lot of like nuance that now that I'm
Speaker 4: at the SEC, I very much appreciate. But technically we
Speaker 4: have not done rulemaking up until this point. It has
Speaker 4: been a series of staff statements commission interpretations as to
Speaker 4: what is the existing law. Commissioners have talked about doing
Speaker 4: rule making, and I you could expect something like that
Speaker 4: in the future, but.
Speaker 1: We're doing a lot of things that that.
Speaker 4: Are very similar to legislation, that are in tandemal with legislation.
Speaker 4: The commissioners who are in charge of the Commission very
Speaker 4: much support market structure, and so you know, we're talking
Speaker 4: to the same people that go into Congress and talk
Speaker 4: about the Clarity Act.
Speaker 1: We're trying to harmonize.
Speaker 4: Between US and the CFTC as much as possible, and
Speaker 4: you know, they do support legislation win and if legislation
Speaker 4: becomes law, we will fully implement it and try to,
Speaker 4: you know, provide as much flexibility as we can. So
Speaker 4: I'd say these things are complementary rather than opposed to
Speaker 4: each other. And we talk with Congress all the time
Speaker 4: about what we're working on, how this relates to Clarity Act,
Speaker 4: and ultimately we do support that becoming law.
Speaker 3: When do you think the Clarity Act might pass?
Speaker 4: I mentioned my history having been in Congress for quite
Speaker 4: a while. It's an arduous process. There's one hundred and
Speaker 4: one year to one of five hundred and thirty five
Speaker 4: different people that have to get this across the finish line.
Speaker 4: It's it's tough, but I know a lot of very smart,
Speaker 4: brilliant staffers and members working on this, and they're really pursuing,
Speaker 4: you know, as altruistically as they can. How do you
Speaker 4: create a good how do you compromise in creating a
Speaker 4: regulatory pathway for these things? And so there's a lot
Speaker 4: of good people doing a lot of honest work just
Speaker 4: trying to get this across the finish line, and we're
Speaker 4: doing what we can to support them.
Speaker 2: Well. Landon This has been super informative. Thank you so
Speaker 2: much for joining us.
Speaker 1: Absolutely thanks for the time.
Speaker 3: This episode is brought to you by bitgo, the trusted
Speaker 3: infrastructure behind the digital asset economy. If you're serious about crypto,
Speaker 3: whether you're an investor, institution, or building in this space,
Speaker 3: you already know security, compliance, and execution are everything. And
Speaker 3: that's exactly what bitco delivers. With over a decade of
Speaker 3: experience and fifty five hundred plus institutional clients across one
Speaker 3: hundred plus countries, bitco provides a full suite of services
Speaker 3: including qualified custody, trading, staking, financing, and stable coin infrastructure,
Speaker 3: all in one platform. Let's break it down. Want to
Speaker 3: launch crypto services fast? Bitgos Crypto as a service lets banks,
Speaker 3: FinTechs and platforms go live in as little as a
Speaker 3: couple of months without dealing with complex licensing or infrastructure.
Speaker 3: If you're looking to launch a stable coin, bidgo offers
Speaker 3: a complete stable coin as a service platform, from reserves
Speaker 3: and smart contracts to compliance, built to align with the
Speaker 3: new US regulatory framework. That is the genius at want
Speaker 3: to earn rewards on your crypto? Bitco runs one of
Speaker 3: the largest institutional staking platforms with tens of billions staked
Speaker 3: across fifty plus networks, all while your assets stays securely
Speaker 3: in qualified custody. Need deep liquidity and execution. Their trading
Speaker 3: platform aggregates liquidity across thirty plus venues, giving you better
Speaker 3: pricing and the ability to trade directly from custody. No
Speaker 3: pre funding required for approved clients, and if you need capital,
Speaker 3: bitco offers crypto backed financing so you can unlock liquidity
Speaker 3: without selling your assets. So here's the bottom line. Bitco
Speaker 3: is one of the first federally chartered digital asset infrastructure companies,
Speaker 3: offering regulated, insured custody and a platform built for institutions
Speaker 3: but accessible to for thinking players across the space. So
Speaker 3: whether you're scaling a fintech, managing a fund, or building
Speaker 3: the future of finance, bitco gives you all the tools
Speaker 3: that you need to do this securely, compliantly, and at scale.
Speaker 3: So learn more at bitgo dot com and see why
Speaker 3: the biggest players in crypto trust Bitgo. Thank you so
Speaker 3: much for tuning in. Please hit the like button subscribe
Speaker 3: if you haven't as yet. If you're listening on a
Speaker 3: podcast platform such as Spotify or Apple, please follow and
Speaker 3: leave a five star rating. Thank you so much,