WEBVTT 1 00:00:00.080 --> 00:00:03.960 You can have a token that is not itself a security, 2 00:00:04.200 --> 00:00:07.679 but is offered in a transaction that is a securities offering. 3 00:00:07.919 --> 00:00:11.880 Thinking about how that applies, I think that's really caused 4 00:00:11.960 --> 00:00:15.599 Congress and us at the SEC to think about what 5 00:00:15.679 --> 00:00:19.679 kind of rules make sense here. Congress has the opportunity 6 00:00:19.719 --> 00:00:22.960 now to write a new framework. 7 00:00:23.120 --> 00:00:25.679 So, Commissioner Purse, you mean the oranges in my house 8 00:00:25.760 --> 00:00:27.679 right now are the supermarket are not securities? 9 00:00:28.199 --> 00:00:29.320 Because how I'm. 10 00:00:29.160 --> 00:00:31.199 Going to say? They're not securities, but you could still 11 00:00:31.199 --> 00:00:33.280 figure out a way to sell them in a transaction 12 00:00:33.359 --> 00:00:34.960 that is a securities transaction. 13 00:00:40.159 --> 00:00:42.600 This episode is brought to you by Uphold, which is 14 00:00:42.640 --> 00:00:45.679 a great crypto platform that makes it easy to buy, sell, 15 00:00:45.840 --> 00:00:50.600 and stay crypto assets. Uphold has over three hundred plus cryptocurrencies, 16 00:00:50.640 --> 00:00:53.520 including bitcoin in all the top all coins, and they 17 00:00:53.600 --> 00:00:58.079 offer a crypto staking on over nineteen crypto assets. I've 18 00:00:58.079 --> 00:01:00.600 been a user of the platform for many years. They 19 00:01:00.640 --> 00:01:03.840 are safe and reliable, they don't commingle or lend out 20 00:01:03.840 --> 00:01:07.239 your crypto funds, and they are one hundred percent reserve. 21 00:01:07.519 --> 00:01:11.400 You can review their transparency report. 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So if you do like to 32 00:01:41.840 --> 00:01:44.719 learn more about Uphold and all the great services they offer, 33 00:01:45.079 --> 00:01:47.879 visit the link in the description. Hey, folks, welcome into 34 00:01:47.879 --> 00:01:50.599 the Thinking Crypto podcast. I'm your host Tony Edward, and 35 00:01:50.640 --> 00:01:53.519 we are recording at Station three in New York's Financial 36 00:01:53.519 --> 00:01:58.159 District and my guest is SEC Commissioner Hester Perce, Commissioner Perse. 37 00:01:58.159 --> 00:01:59.359 Great to see you, Tony. 38 00:01:59.359 --> 00:02:01.159 It's great to be you, know how I have to 39 00:02:01.200 --> 00:02:03.560 start my views and my own views as a commissioner, 40 00:02:03.640 --> 00:02:06.400 not necessarily those of the SEC or my fellow commissioners. 41 00:02:06.680 --> 00:02:09.759 Absolutely, we've spoken many times over the years, so I'm 42 00:02:09.759 --> 00:02:13.240 excited to be having this conversation with you now because 43 00:02:13.479 --> 00:02:15.879 things have changed completely. It's a great time to be 44 00:02:15.919 --> 00:02:19.560 in the crypto industry. Lots happening in DC, lots happening 45 00:02:19.560 --> 00:02:23.520 at the SEC. You're in town for a crypto roundtable? 46 00:02:23.599 --> 00:02:24.080 Is that right? 47 00:02:24.560 --> 00:02:28.120 That's right. We've had a series of roundtables this year. 48 00:02:28.319 --> 00:02:33.159 The first we're sort of issue oriented. We talked about 49 00:02:33.240 --> 00:02:35.840 things like what is the definition of a security as 50 00:02:35.840 --> 00:02:40.520 it relates to crypto. We talked about custody trading. And 51 00:02:40.840 --> 00:02:42.840 now what we're trying to do is go out on 52 00:02:42.919 --> 00:02:45.719 the road and meet with smaller projects that maybe wouldn't 53 00:02:45.759 --> 00:02:48.599 have a chance to travel to DC and so trying 54 00:02:48.599 --> 00:02:49.719 to hear their feedback. 55 00:02:49.840 --> 00:02:52.840 So the roundtables, it sounds like you've got a lot 56 00:02:52.840 --> 00:02:55.719 of good reception. Folks are engaging, they're talking and sharing 57 00:02:55.800 --> 00:02:56.919 their thoughts and things like that. 58 00:02:57.319 --> 00:02:59.639 Yeah, we've gotten a lot of great reception, not only 59 00:02:59.680 --> 00:03:02.280 to the tables, but also I put out a set 60 00:03:02.319 --> 00:03:05.719 of questions in February and we're still getting great answers 61 00:03:05.719 --> 00:03:09.800 to those questions. In so the feedback is really important 62 00:03:09.800 --> 00:03:11.319 for us to try to figure out how to move 63 00:03:11.360 --> 00:03:12.800 forward in a way that's productive. 64 00:03:13.199 --> 00:03:14.960 Well, I got to give you your flowers, thank you 65 00:03:15.000 --> 00:03:18.639 for being a leader, and you know, having to transparency 66 00:03:18.639 --> 00:03:21.759 and meeting with folks and some the small entrepreneurs and innovators. 67 00:03:21.840 --> 00:03:23.080 So that's really great to hear. 68 00:03:23.280 --> 00:03:23.479 Well. 69 00:03:23.520 --> 00:03:26.280 I mean again, it's their giving of their time to 70 00:03:26.360 --> 00:03:28.319 help us get to a better place, and I think 71 00:03:28.879 --> 00:03:31.280 it's nice of them to be willing to do that. 72 00:03:31.960 --> 00:03:34.719 Now, a good great segue it is into Project Crypto, 73 00:03:34.919 --> 00:03:38.039 which was announced by Chair Paul Adkins and some of 74 00:03:38.120 --> 00:03:40.159 the initiatives you're going to be doing there. Tell us 75 00:03:40.159 --> 00:03:42.759 a bit about Project Crypto, what's the goal and some 76 00:03:42.840 --> 00:03:44.159 of the recent initiatives. 77 00:03:44.719 --> 00:03:47.719 The goal of Project Crypto is to really provide the 78 00:03:47.759 --> 00:03:50.360 clarity that the industry has been asking for now for 79 00:03:50.960 --> 00:03:53.919 as long as we've been talking to each other and longer, 80 00:03:54.039 --> 00:03:57.360 and so really to get to the place where someone 81 00:03:57.360 --> 00:04:00.240 who's trying to launch a crypto project knows what the 82 00:04:00.360 --> 00:04:03.280 possible avenues are to do that in a way that's 83 00:04:03.319 --> 00:04:06.840 compliant in the US. And so we've started out by 84 00:04:06.879 --> 00:04:12.280 providing some guidance. We're working the Crypto Task Force is 85 00:04:12.319 --> 00:04:15.159 a set group of people at the SEC, but we're 86 00:04:15.159 --> 00:04:18.360 working with staff across the agency, and so you might 87 00:04:18.360 --> 00:04:20.720 have seen there are some guidance that's come out around 88 00:04:20.759 --> 00:04:25.800 things like meme coins around mining staking, and we're looking 89 00:04:25.839 --> 00:04:29.199 at providing more working with the staff to provide more 90 00:04:29.199 --> 00:04:31.800 of that type of guidance, also to bring that guidance 91 00:04:31.879 --> 00:04:35.040 up to the commission level where possible, so that it 92 00:04:35.120 --> 00:04:37.279 has a little bit more staying power, and then to 93 00:04:37.360 --> 00:04:40.639 get to even more staying power, we're looking at writing 94 00:04:40.720 --> 00:04:45.839 rules where that's appropriate, working also with Congress on the legislation, 95 00:04:46.000 --> 00:04:50.439 providing technical assistance there, and then looking at ways we 96 00:04:50.480 --> 00:04:53.959 can provide exemptions for people who have specific things they're 97 00:04:54.000 --> 00:04:57.759 trying to do. And so that's it keeps us very busy, 98 00:04:57.800 --> 00:05:00.199 but that's kind of a little bit of what we're 99 00:05:00.240 --> 00:05:00.920 trying to achieve. 100 00:05:01.040 --> 00:05:03.800 And there's so much in the crypto space. I'm neck 101 00:05:03.839 --> 00:05:05.560 deep in it in the day to day, but it's 102 00:05:05.720 --> 00:05:07.199 always something new, which is great. 103 00:05:07.240 --> 00:05:07.879 It's innovation. 104 00:05:08.879 --> 00:05:11.199 So I can can't imagine what it's like for you guys, 105 00:05:11.240 --> 00:05:13.439 and you know, trying to figure out all these nuts 106 00:05:13.439 --> 00:05:16.399 and bolts and components of this industry. You know, you 107 00:05:16.480 --> 00:05:21.360 mentioned meme coins and liquid staking, excuse my ignorance on this. 108 00:05:21.480 --> 00:05:23.680 So the guidance that you put out there, does that 109 00:05:23.759 --> 00:05:26.480 automatically get added to like the Clarity Act and legislation 110 00:05:26.519 --> 00:05:27.560 that Congress is working on. 111 00:05:28.439 --> 00:05:32.240 No. What it does though, is it helps Congress focus 112 00:05:32.759 --> 00:05:34.639 because we say, look, some of these things just are 113 00:05:34.680 --> 00:05:39.600 not in our jurisdiction that we have. Now, if Congress 114 00:05:39.639 --> 00:05:42.360 wants to give someone jurisdiction over those things, it can, 115 00:05:42.959 --> 00:05:46.439 but it doesn't need to. So it's really more of 116 00:05:46.600 --> 00:05:49.439 just telling people out in the world who are either 117 00:05:49.519 --> 00:05:53.920 buying meme coins or who are issuing them that it's 118 00:05:54.240 --> 00:05:57.279 it's not generally within our wheelhouse. Now, it's always important 119 00:05:57.319 --> 00:06:00.639 to say, you know, we're lawyers here. Well, I'm a lawyer, 120 00:06:00.680 --> 00:06:05.000 so facts circumstances matter. Yeah, And so you can take 121 00:06:05.040 --> 00:06:07.680 something that is not a security and you can offer 122 00:06:07.720 --> 00:06:10.120 it in a way that it is a security, as 123 00:06:10.240 --> 00:06:12.959 probably a lot of people in this space know. That's 124 00:06:13.000 --> 00:06:14.600 kind of where the Howie test comes in. 125 00:06:15.399 --> 00:06:20.759 Absolutely, and again another question where I think I'm very 126 00:06:20.759 --> 00:06:23.160 curious about. So let's say meme coins are not securities. 127 00:06:23.160 --> 00:06:25.920 But in every market there are bad actors. They're good 128 00:06:25.920 --> 00:06:27.800 actors and bad actors people who come in and try 129 00:06:27.800 --> 00:06:30.759 to take advantage of folks. So we've seen certain folks 130 00:06:30.839 --> 00:06:33.439 launch meme coins and they do what's called a rug pull. 131 00:06:34.800 --> 00:06:36.639 Is the SEC involved in that, or is a law 132 00:06:36.720 --> 00:06:38.639 enforcement there are folks who have to handle that. 133 00:06:39.439 --> 00:06:41.839 I think that's one of the reasons that we wanted 134 00:06:41.879 --> 00:06:45.000 to put out this guidance is to say people need 135 00:06:45.040 --> 00:06:49.160 to be careful out there because sometimes you are buying 136 00:06:49.199 --> 00:06:52.920 something that is not a security and then when something 137 00:06:52.959 --> 00:06:56.240 bad happens, you see people coming to the SEC and saying, 138 00:06:56.399 --> 00:06:58.480 can you help us, can you get our money back? 139 00:06:59.199 --> 00:07:02.120 And if it wasn't a securities transaction, there's really nothing 140 00:07:02.120 --> 00:07:04.240 we can do. And even sometimes when it is a 141 00:07:04.279 --> 00:07:07.279 securities transaction, the money is already gone. So I really 142 00:07:07.399 --> 00:07:10.680 urge people to be very careful to think about whether 143 00:07:10.759 --> 00:07:12.800 they can afford to lose the money that they're buying. 144 00:07:12.839 --> 00:07:16.240 They're using to buy something, there's a lot of hype 145 00:07:16.279 --> 00:07:19.079 and there's a lot of excitement. Yeah, doesn't mean that 146 00:07:19.120 --> 00:07:20.920 you're going to come away from this a millionaire. You 147 00:07:20.959 --> 00:07:23.319 may come away from this having a lot less money 148 00:07:23.360 --> 00:07:25.079 than you did when you went in. So people need 149 00:07:25.120 --> 00:07:28.839 to be careful. But yes, when there are frauds, there 150 00:07:28.879 --> 00:07:32.079 may be another government agency, whether at the state or 151 00:07:32.120 --> 00:07:39.040 federal level, that can go after those fraudsters. But it's 152 00:07:39.279 --> 00:07:42.279 not always the SEC. I think sometimes people think whenever 153 00:07:42.360 --> 00:07:46.360 something bad happens in the in this general realm, that 154 00:07:46.439 --> 00:07:48.399 it's the SEC and that's just not the case. 155 00:07:49.079 --> 00:07:52.759 Yeah, And it's also finding that balance because I believe 156 00:07:52.800 --> 00:07:54.680 in the free market, you can go plate a lot, 157 00:07:54.759 --> 00:07:56.839 or you can want you can go to vegas and gamble, 158 00:07:57.399 --> 00:07:59.639 but you got to know, you've got to have self control, 159 00:07:59.680 --> 00:08:01.439 you got to do your research, you got to be smart. 160 00:08:01.480 --> 00:08:04.399 There's a responsibility to the individual, right. 161 00:08:04.319 --> 00:08:07.360 Absolutely, right. I think that's how the free markets work 162 00:08:07.560 --> 00:08:12.680 and how this an environment in which we don't tell 163 00:08:12.720 --> 00:08:14.920 you exactly what you can and can't buy. That means 164 00:08:14.920 --> 00:08:17.319 that you do have to take that responsibility yourself and 165 00:08:17.639 --> 00:08:20.439 exercise some judgment. And if you if you want to 166 00:08:20.480 --> 00:08:22.600 go have fun and you don't want to do your research, 167 00:08:22.639 --> 00:08:25.040 that's fine, but then the consequences might not be good. 168 00:08:25.360 --> 00:08:29.160 Yeah, Yeah, that definitely makes sense. Now, another big guidance 169 00:08:29.319 --> 00:08:33.440 you folks provided was liquid staking. Certain liquid staked activities 170 00:08:33.440 --> 00:08:34.399 are not securities. 171 00:08:35.240 --> 00:08:35.799 That's huge. 172 00:08:36.039 --> 00:08:37.360 You know. I've spoken to it of folks that like 173 00:08:37.480 --> 00:08:39.799 lightoh and so forth, and they find this guidance to 174 00:08:39.840 --> 00:08:42.279 be incredible. Talk to us about talk to us a 175 00:08:42.320 --> 00:08:46.200 bit about the approach to liquid staking and the staking 176 00:08:46.279 --> 00:08:47.039 marketing in general. 177 00:08:47.679 --> 00:08:50.480 The approach we're taking is that because it's really more 178 00:08:50.519 --> 00:08:54.519 of a technical service than anything else, it doesn't make 179 00:08:54.559 --> 00:08:58.159 sense for it to be within our ambit. When there's 180 00:08:58.320 --> 00:09:02.080 discretion that is involved, that sort of changes the dynamic. 181 00:09:02.240 --> 00:09:06.759 But when it's more of a technical service, then that 182 00:09:07.080 --> 00:09:09.559 wouldn't fall within the SEC's jurisdiction. 183 00:09:10.000 --> 00:09:10.480 Got it. 184 00:09:12.080 --> 00:09:15.519 There was recent news that members of the House, a 185 00:09:15.519 --> 00:09:18.799 few legislators send I shouldn't say a few nine in fact, 186 00:09:19.159 --> 00:09:21.919 send a letter to SEC Chair Paul Atkins about opening 187 00:09:21.960 --> 00:09:24.559 up investments in four to one case, which included crypto 188 00:09:25.080 --> 00:09:26.759 talk to us a bit about that. Is this also 189 00:09:26.840 --> 00:09:30.720 in the general movement of relaxing accreditation laws and things 190 00:09:30.799 --> 00:09:31.159 like that. 191 00:09:32.159 --> 00:09:35.200 Yeah, I think there's been a realization that as the 192 00:09:35.240 --> 00:09:41.000 public markets have faced more competition frankly from the private markets, 193 00:09:41.080 --> 00:09:44.559 more activity is happening in the private markets, and retail 194 00:09:44.600 --> 00:09:49.200 investors are effectively shut out of those markets now, and 195 00:09:49.279 --> 00:09:51.960 so there's been more interest in seeing if we can 196 00:09:52.000 --> 00:09:54.840 figure out a way to give retail investors access to 197 00:09:54.879 --> 00:09:58.120 the private markets so that they can diversify their portfolios more. 198 00:09:58.720 --> 00:10:00.879 And one way to do that would to open up 199 00:10:01.000 --> 00:10:05.039 possibilities through your four oh one K of what you 200 00:10:05.080 --> 00:10:09.159 could invest in. Now again, people need to be careful, right, 201 00:10:09.240 --> 00:10:14.240 because if you're investing your retirement funds in something, you 202 00:10:14.320 --> 00:10:16.120 need to be thinking about how much money do you 203 00:10:16.159 --> 00:10:18.360 need in retirement, how much do you have, what's the 204 00:10:18.480 --> 00:10:21.720 risk associated? So people need to do that calculus. But 205 00:10:22.320 --> 00:10:25.879 the idea is to get broader diversification to people who 206 00:10:25.919 --> 00:10:29.399 are now really prohibited from diversifying. 207 00:10:30.039 --> 00:10:32.799 And I feel like it's time. The technologies here, the 208 00:10:32.840 --> 00:10:36.720 access to information and education. I mean, we have our smartphones. 209 00:10:36.759 --> 00:10:39.440 We can go to Google and research things that you 210 00:10:39.480 --> 00:10:42.879 know a couple of seconds. So I feel like the laws, 211 00:10:43.080 --> 00:10:46.799 while they may fifty years ago, were in place to 212 00:10:46.799 --> 00:10:49.639 protect consumers because you didn't have readily available information at 213 00:10:49.679 --> 00:10:50.440 your fingertips. 214 00:10:51.360 --> 00:10:52.440 Now it's completely different. 215 00:10:52.679 --> 00:10:55.399 Well, I think that is a very important point, which 216 00:10:55.480 --> 00:11:00.600 is the information landscape has changed so dramatically, and so 217 00:11:00.840 --> 00:11:03.960 I think it is fair to look at that again 218 00:11:04.039 --> 00:11:06.360 and say, wait a minute, do the rules that were 219 00:11:06.360 --> 00:11:09.480 written And this is complicated, right, Some of this is 220 00:11:11.120 --> 00:11:14.039 through judicial cases and things like that, so it's it's 221 00:11:14.279 --> 00:11:17.679 it's a complicated legal landscape. But I think the information 222 00:11:18.279 --> 00:11:22.639 changes that are out there and the accessibility is really 223 00:11:22.759 --> 00:11:24.480 a factor we should take into account. 224 00:11:24.759 --> 00:11:25.600 Yeah. Absolutely. 225 00:11:25.679 --> 00:11:27.480 Now, of course people have to be careful what their 226 00:11:27.519 --> 00:11:29.919 information sources are. They have to do some vetting and 227 00:11:29.960 --> 00:11:32.600 you know, don't just read one thing, look at look 228 00:11:32.639 --> 00:11:36.120 for more information. We have a website investor dot gov 229 00:11:36.159 --> 00:11:37.960 that has a lot of information that people can go 230 00:11:38.039 --> 00:11:38.960 check out as well. 231 00:11:39.600 --> 00:11:42.080 I tried to do my best on my podcast, like 232 00:11:42.399 --> 00:11:44.799 if you're joining a Telegra group, a Discord group, or 233 00:11:44.840 --> 00:11:47.360 some guy and X sends you a chart, just do 234 00:11:47.480 --> 00:11:49.840 your homework. Double check doesn't mean that that's accurate. 235 00:11:50.360 --> 00:11:52.559 Yeah, And you know the story is, if you're getting 236 00:11:52.559 --> 00:11:55.639 someone who tells you to invest in is not charging 237 00:11:55.679 --> 00:11:57.960 you anything for giving you advice, You've got to ask 238 00:11:58.080 --> 00:12:02.120 where is that person making make is money? Is he 239 00:12:02.200 --> 00:12:05.679 making it based on you? Or what is the source? 240 00:12:05.720 --> 00:12:09.519 So always ask those questions. And if you don't get answers, 241 00:12:09.600 --> 00:12:12.679 or if you get told this is the last day 242 00:12:12.720 --> 00:12:14.600 that you can invest, you can't take some time to 243 00:12:14.639 --> 00:12:16.919 think about it. There'll always be something else you can 244 00:12:17.000 --> 00:12:17.559 invest in. 245 00:12:17.720 --> 00:12:18.399 Oh for sure. 246 00:12:19.159 --> 00:12:22.600 Now, speaking of options and investing, I want to talk 247 00:12:22.639 --> 00:12:25.279 about all coin ETFs. We have a Bitcoin ETF and 248 00:12:25.320 --> 00:12:28.360 an Ethereal METF in the market spot. Of course, folks 249 00:12:28.360 --> 00:12:31.960 are wondering about XRP, Salon and other all coins. Recently, 250 00:12:32.200 --> 00:12:35.399 the SEC approved gray Scales Digital Large Cap Fund, which 251 00:12:35.399 --> 00:12:37.600 is really great because that's a basket. Tell us about 252 00:12:37.639 --> 00:12:40.240 the approach and any timeline you can give about these 253 00:12:40.279 --> 00:12:41.000 other ETFs. 254 00:12:41.399 --> 00:12:45.519 Yeah, well, we just approved generic listing standards for a 255 00:12:45.559 --> 00:12:49.679 number of exchanges, which makes it much easier for these 256 00:12:49.759 --> 00:12:52.720 ETPs to get through the process at the SEC. There 257 00:12:52.720 --> 00:12:55.080 are multiple processes you have to get through, but this 258 00:12:55.799 --> 00:12:58.799 really clears the way for that to be much smoother. Sure, 259 00:12:59.080 --> 00:13:02.759 and I think that's what people have been waiting for 260 00:13:03.360 --> 00:13:07.039 to get access to some of these other types of ETPs. 261 00:13:08.600 --> 00:13:12.639 When you're we've had this conversation before, is the process 262 00:13:12.720 --> 00:13:15.440 still there needs to be a futures markets. 263 00:13:15.120 --> 00:13:19.879 For it doesn't, And so I commend the people to 264 00:13:19.919 --> 00:13:22.120 look at the generic listening standards and they can see 265 00:13:22.120 --> 00:13:24.559 that it's really a new approach. 266 00:13:25.159 --> 00:13:25.879 That's really great. 267 00:13:26.039 --> 00:13:29.919 So Okay, that's I completely missed that, even though I 268 00:13:30.000 --> 00:13:33.200 read that the futures not necessarily need to be there. 269 00:13:33.200 --> 00:13:37.279 So that's really great news for other all coin projects 270 00:13:37.279 --> 00:13:38.879 out there that are maybe in the top ten or 271 00:13:38.879 --> 00:13:41.399 fifteen that are very liquid and people want access through. 272 00:13:41.480 --> 00:13:43.399 Yeah, I mean, I expect we'll see more of those 273 00:13:43.519 --> 00:13:46.600 ETPs coming through under the generic standards. And that's not 274 00:13:46.679 --> 00:13:48.720 the only way that you can get a product through, 275 00:13:48.799 --> 00:13:51.639 but that's a more streamlined approach. 276 00:13:53.240 --> 00:13:54.639 I don't know if you can speak to this because 277 00:13:54.759 --> 00:13:56.799 it's very kind of left field, but the folks at 278 00:13:56.840 --> 00:14:00.320 rex ospray they use a different type of model. 279 00:14:00.320 --> 00:14:02.200 I think the nineteen forties Act. 280 00:14:02.320 --> 00:14:07.360 Yeah, that's the ETF model Exchange traded fund versus exchange 281 00:14:07.440 --> 00:14:10.720 traded product, which is so exchange traded funds are a 282 00:14:10.759 --> 00:14:15.519 subset of broader exchange traded products. Exchange traded funds are 283 00:14:15.559 --> 00:14:18.799 regulated under the nineteen forty Act, and so there's a 284 00:14:19.240 --> 00:14:23.480 there's a more intense regulatory framework there. Now. Again, I 285 00:14:23.559 --> 00:14:27.159 really caution people when they're buying any kind of product, 286 00:14:27.240 --> 00:14:29.840 whether it's an ETF or some other kind of ETP, 287 00:14:31.559 --> 00:14:34.639 read the disclosure, think about what you're getting, think about 288 00:14:34.639 --> 00:14:39.519 the risks associated Ask yourself, is this the right product? 289 00:14:41.000 --> 00:14:43.279 Is it just an interesting product? Do I want to 290 00:14:43.320 --> 00:14:45.240 watch it for a while before I decide to buy 291 00:14:45.279 --> 00:14:49.600 it make you know, use use your judgment, think about 292 00:14:49.600 --> 00:14:50.960 it before you buy products. 293 00:14:51.480 --> 00:14:53.679 A lot of folks are chomping at the bit waiting 294 00:14:53.720 --> 00:14:57.240 for staking in the Etherorem's body. TF would liquid staking 295 00:14:57.279 --> 00:15:00.600 clarity provided by the SEC. Can we anticipate it and approval? 296 00:15:01.360 --> 00:15:03.720 Well, Again, the way the process works is people have 297 00:15:03.759 --> 00:15:06.000 to come in and ask, so, if you know, they 298 00:15:06.039 --> 00:15:07.879 have to make decision about whether they want to have 299 00:15:07.919 --> 00:15:10.279 a staking aspect to their product, and then they come 300 00:15:10.279 --> 00:15:13.159 in and ask and we work with them around disclosures 301 00:15:13.200 --> 00:15:13.919 and things like that. 302 00:15:15.360 --> 00:15:16.639 I don't know if you can speak to this because 303 00:15:16.679 --> 00:15:19.279 it gets a bit into the weeds. But does it 304 00:15:19.320 --> 00:15:22.879 make sense to add staking to the existing ets or 305 00:15:22.919 --> 00:15:25.960 create new ets podyts Let's say Etherorem as an example, 306 00:15:26.639 --> 00:15:29.080 as a separate product, and once again that might be 307 00:15:29.159 --> 00:15:31.240 outside the SEC's pew. 308 00:15:31.519 --> 00:15:35.399 So your question is really on whether we need to 309 00:15:35.480 --> 00:15:39.360 have change the existing products or come in and create 310 00:15:39.399 --> 00:15:42.799 a new one. I mean, I think people probably will 311 00:15:42.799 --> 00:15:46.080 do both, you know. I think staking is something that 312 00:15:46.120 --> 00:15:48.759 people have talked about as being a feature they want 313 00:15:48.799 --> 00:15:51.039 to be able to have, and so I suspect that 314 00:15:51.080 --> 00:15:54.799 some existing funds may decide to products may decide to 315 00:15:54.799 --> 00:15:59.039 include that, and I expect there'll be new products. It's 316 00:15:59.039 --> 00:16:01.320 not really up to the s I think again, it's 317 00:16:01.360 --> 00:16:06.559 really important to emphasize that the market decides what products 318 00:16:06.600 --> 00:16:10.159 are available. People can decide whether they like them or not. 319 00:16:10.320 --> 00:16:12.480 They can decide whether the fees are high enough or not. 320 00:16:13.639 --> 00:16:15.840 Our role really on a lot of these things is 321 00:16:15.879 --> 00:16:18.240 just to work with them on process and disclosure and 322 00:16:18.279 --> 00:16:21.480 things like that. And I encourage that the sponsors that 323 00:16:21.519 --> 00:16:24.320 come in that are working with us to listen to 324 00:16:24.360 --> 00:16:26.639 the to the to work with the staff, and listen 325 00:16:26.720 --> 00:16:30.120 to the staff's feedback on disclosures, because it no one 326 00:16:30.200 --> 00:16:33.960 is better off if the investor buying the product doesn't 327 00:16:34.039 --> 00:16:36.960 understand what she's getting. So we want to get these 328 00:16:36.960 --> 00:16:41.000 disclosures right. You know, I really do urge people to 329 00:16:41.120 --> 00:16:42.840 engage in good faith on that process. 330 00:16:43.480 --> 00:16:46.320 Let's talk a bit about the disclosure aspect, because I've 331 00:16:46.320 --> 00:16:47.200 heard this over the years. 332 00:16:47.240 --> 00:16:48.799 I get it, but. 333 00:16:50.320 --> 00:16:52.720 You know, it goes back to maybe like the Ripple case, 334 00:16:52.759 --> 00:16:56.039 where secondary market sales were will not a security. 335 00:16:57.559 --> 00:16:59.240 How do you I don't know. 336 00:16:59.519 --> 00:17:01.840 I'm trying to figure out how that all works. Is 337 00:17:01.840 --> 00:17:03.759 it the exchange you still have to give a disclosure 338 00:17:03.759 --> 00:17:06.559 that you sign up coinbase and you get a disclosure 339 00:17:06.599 --> 00:17:09.759 for each of these assets, or a general disclosure that 340 00:17:09.799 --> 00:17:13.119 you're entering the crypto field. Here are some things you 341 00:17:13.160 --> 00:17:13.519 need to know. 342 00:17:13.920 --> 00:17:16.279 Well, I mean, my comments around disclosures really went to 343 00:17:16.319 --> 00:17:19.359 ETPs because there are a lot of exchange traded products 344 00:17:19.400 --> 00:17:23.279 out there, and you know, you have to do your 345 00:17:23.319 --> 00:17:26.039 research when you're buying, whether it's crypto related one or not. 346 00:17:26.119 --> 00:17:28.240 You've got to think about what or work with a 347 00:17:28.240 --> 00:17:32.000 financial professional to help you decide what works for you. 348 00:17:32.599 --> 00:17:35.880 With respect to something like a crypto asset, if it's 349 00:17:35.920 --> 00:17:40.519 not a security and it's not being offered into transactions 350 00:17:40.559 --> 00:17:45.519 that security is offering, we do not have disclosure rules 351 00:17:45.720 --> 00:17:49.559 that apply in that instance. Okay, Now, you could have 352 00:17:49.640 --> 00:17:52.799 an exchange that decided to have a disclosure framework. You 353 00:17:53.200 --> 00:17:59.279 could have and we've seen this right that there's some organic, 354 00:17:59.559 --> 00:18:02.599 indisc re led effort to try to get better disclosure 355 00:18:02.680 --> 00:18:06.119 around tokens, and that doesn't have to be led by 356 00:18:06.119 --> 00:18:10.000 the government. That can happen in another you know, just organically. 357 00:18:10.079 --> 00:18:14.400 As I said, Okay, that makes sense. So let's talk 358 00:18:14.400 --> 00:18:15.359 about the ripple case. 359 00:18:16.039 --> 00:18:17.079 We can finally talk. 360 00:18:18.480 --> 00:18:19.480 So commissioner parts. 361 00:18:19.559 --> 00:18:21.400 You know there's gonna be a lot of the XRP 362 00:18:21.640 --> 00:18:24.960 army listening here. Why was this case brought in the 363 00:18:25.000 --> 00:18:27.960 first place? Was it just simply it was the wildwist 364 00:18:28.039 --> 00:18:30.640 days of the crypto market, the regulators, the industry, No 365 00:18:30.680 --> 00:18:32.720 one really knew what was going on, just that this 366 00:18:32.799 --> 00:18:34.759 is a technology we're building, we're innovating. 367 00:18:35.200 --> 00:18:36.359 Was that the crux of it. 368 00:18:37.000 --> 00:18:39.240 Well, as I said at the beginning, I can only 369 00:18:39.279 --> 00:18:42.680 speak for myself, and since I didn't support the case, 370 00:18:42.680 --> 00:18:45.640 you're probably not asking the right woman. Why we brought 371 00:18:45.680 --> 00:18:51.039 the case again, it was part of a broader effort 372 00:18:51.079 --> 00:18:53.599 that I was concerned about, which is using enforcement to 373 00:18:53.680 --> 00:18:59.119 try to write rules in a pretty difficult landscape. And 374 00:18:59.240 --> 00:19:02.240 so what I think would have made more sense is 375 00:19:02.279 --> 00:19:05.519 to think about how different projects were going about offering 376 00:19:05.559 --> 00:19:08.880 their tokens and trying to get to a world where 377 00:19:08.880 --> 00:19:12.240 we did end up with better disclosure, but also where 378 00:19:13.039 --> 00:19:16.880 folks had the choice of whether they wanted to participate 379 00:19:17.000 --> 00:19:19.359 in these markets or not. 380 00:19:19.960 --> 00:19:20.240 Sure. 381 00:19:20.559 --> 00:19:23.960 What did you think about Judge Taurus's ruling secondary market 382 00:19:23.960 --> 00:19:26.319 sales are not securities? But she also said, like certain 383 00:19:26.359 --> 00:19:30.319 institutional activities that Ripple did were considered securities. Do you 384 00:19:30.359 --> 00:19:33.359 think that's going to be eliminated so to speak, because 385 00:19:33.359 --> 00:19:35.720 of the Clarity Act and things that are being put 386 00:19:35.759 --> 00:19:36.480 out by the SEC. 387 00:19:36.880 --> 00:19:39.759 I mean, her ruling was pretty nuanced, So I think 388 00:19:40.240 --> 00:19:42.400 from a lawyer's perspective, you have to look at the 389 00:19:42.480 --> 00:19:46.599 nuance of that ruling. But I think that the point 390 00:19:46.640 --> 00:19:49.440 that that case really underscores is that you can have 391 00:19:49.519 --> 00:19:53.440 a token that is not itself a security, but is 392 00:19:53.519 --> 00:19:57.319 offered in a transaction that is a securities offering, and 393 00:19:57.400 --> 00:20:02.200 so thinking about how that applies. I think that's really 394 00:20:02.359 --> 00:20:06.400 caused Congress and us at the SEC and others to 395 00:20:06.440 --> 00:20:11.079 think about what kind of rules make sense here. Congress, 396 00:20:11.119 --> 00:20:13.359 as you said, has or is you alluded to, has 397 00:20:13.400 --> 00:20:18.039 the opportunity now to write a new framework, sure, and 398 00:20:18.559 --> 00:20:22.119 so thinking about what kind of framework makes sense It 399 00:20:22.160 --> 00:20:25.000 will definitely be done in light of the cases such 400 00:20:25.039 --> 00:20:26.359 as Ripple and other cases. 401 00:20:26.640 --> 00:20:29.160