SEC Commissioner Hester Peirce Unveils Her 2026 Digital Asset Regulation Plans

Transcript

It's really important for people to understand when they're buying things what the risks are associated with it as well as what the prospects and opportunities are. And so that's the role of the SEC when it comes to public companies. We work with them to make sure that they're getting their disclosures. >> Do we see a path to ultimately lay out some some rules of the road so that companies that are public can also offer tokens? Do you see this as something that could potentially shake out in the coming legislation? [music] I'm curious like what does that actually mean and and why is the right of to self- custody of digital assets so important to you personally?

>> Welcome back to the rollup. I'm Robbie. >> I'm Andy. Rob and I met at the University of Florida in [music] 2017 where we first found out about digital assets. >> We learned a lot along the way and we're bringing you face to face with the leaders of our industry. >> Sit back, relax, and enjoy today's episode. [music] Commissioner Pur, uh, welcome to the show. This is the Rollup TV and, uh, it's an absolute pleasure to, uh, host yourself, the the crypto mom, as they call you. So, welcome to the show.

>> And I've got to give you my disclaimer, which is that my views are my views as a commissioner, not necessarily those of the SEC or my fellow commissioners. >> Lovely. Now that we got that out of the way, uh, love to get into it, but also just to welcome you back to work. I'm How do did you have some time off? Uh, what was it like while the government was shut down? Did you pick up some new hobbies, bake some sourdough bread, get into anything uh while while you were away? >> Well, the the way the shutdown works is that people like me get to work. We don't get to to get paid, but we do get to work. So, I was able to uh I was one of the few people who could come to work at the SEC. So, I did I did get get to

do some things I don't normally do, like I did a lot more answering of the phones and things like that, but um but uh I'm very happy to have my colleagues back because um being out for that long, having most of the staff out for that long meant that a lot of the work that we really wanted to move forward was stalled. >> Yeah. [clears throat] Yeah. Um, one of the things that strikes me the most it uh, impressive, fascinating, is how you've been able to balance not just work life balance. I think everyone sort of has a work life balance, but you're extremely adept at internet culture like crypto nativity. Andy and I have been in this in this world for a long long time.

I I see you have the the internet meme culture. Uh, and I I've seen a couple of your speeches and and it really shows through. And I'm just curious what your what your balance is. What what is your work life balance? How do you how do you balance being online but also, you know, putting on the suit, being in the in the arena, uh, with some of the, you know, the decision makers, the lawmakers in the US government? How do you balance these these two very stark contrasting worlds? >> I definitely do not understand the internet meme world. I um I I am I I'm an observer of it which I find interesting but um I'm I'm not really very technically or uh adept or internet

savvy I will say. [laughter] >> Well I mean you must be a little bit because you've been extremely passionate and excited about this technology for some time uh leading the way through different regimes in the US government in the SEC. For some context, Robbie and I spent the last week in New York City at Chainlink SmartCon event and this is one of the most prominent institutional facing events uh that we've ever been to. Robbie and I have been in the space for eight years. I think our first conference was the DC blockchain summit back in 2018. Uh fast forward all the way to SmartCon. And you know, we were sitting doing our our live streaming in a Fidelity SP uh sponsored lounge. We saw the likes of DTCC, the Fed, the White House, JP Morgan, Goldman, many

many other large uh banking, finance and technology names come together. Um in this context, we realize that that there is this this entire uh shifting of priorities within the the US government, within the largest financial institutions in the country, as well as just capital allocators more broadly. And and in this we've kind of came to this idea that 2025 is not only the the line in the sand year but is also this year where the seats at the figurative table are being sat the table is being set with regards to crypto policy with regards to the blockchains the teams the founders the entrepreneurs um that are

uh you know building and have been been building in this industry for for the last five to 10 years. Maybe just from your perspective, what does this year kind of mean for uh the SEC, for crypto, you know, do you do you agree that this is like the line in the sand year with regards to the regulatory clarity? You know, how do you describe what has happened in 2025 thus far from your unique vantage point? I do like the imagery of the the table being set and, you know, chairs being set up and people coming and taking their places at the table and and maybe we can have more of a a grown-up discussion about difficult issues instead of um what was going on in the

past, which I think was people were saying, you know, we just don't want this in the in the respectable room um at all. We think this is not worth um having in the United States. and and that was the message coming from the government. And because of that, I think you saw institutions being very hesitant to walk into this uh crypto industry to to try things out because there was just a lot of legal risk. And so this is definitely this year has been one of of immense change. Um I've I've described it as a 180 and I think it really is. It is has gone from the government seeking to stop um to the government looking for ways to

open the doors. Again, not to do so without taking into account that there potential risks because there are of course and it isn't our job as regulators to to be the innovators. It's just our job to set up an environment in which innovators can do their thing. Markets can weigh in about whether they do or don't want those things that innovators are building. Um and and that's really where we should be. But it is just the beginning. This is a hard project. Getting the regulations right is hard.

And um a big part of whether this will last depends on people who are in the industry who are building things taking it very seriously because this is a really a moment in time where you have you have uh government is willing to you know as I say create a good framework but if you if you don't build good things during that time then a new government will come in sometime a new administration will come in sometime and say we don't see any value here and we'll be back in the same place we were pre2025.

>> Yeah. I I'd love to contextualize 2025 in the broader uh evolution of your tenure as commissioner. Um you've been in the as part of the SEC. Uh I believe you're the longest serving commissioner and your approach to regulation in crypto I'm sure has shifted over the years. Um there was this project crypto uh and Paul Atkins the the chairman has also put forth uh the most recent development in this project which is this token taxonomy and so now it feels like this is really starting to ex the project crypto in America is really starting to accelerate. could you kind of take us

from point A to point B? How has not only the sentiment around crypto and blockchains and digital assets changed? Uh but but a little bit more specifically, how how have you seen this evolve in your own tenure as things have become a little bit more acceptable? What has that opened up for you to do as uh part of the SEC? >> Yeah. Well, it's it's funny to think back on it because I have been here since January of 2018 and it seems in some ways like that's so long and in other ways it just seems like yesterday.

I mean that in in summer of 2018 the commission was denying a Bitcoin exchange traded product which I thought was a ridiculous thing to do at that time and then look how long it took to actually get to an approval. Um it took a long time in years. It also took a a a court uh weighing in and telling us that we better start um applying the rules in a in a way that's not arbitrary. Um and and so and then now you know and along the way we were using enforcement that was that was very frustrating to see, right? We were using enforcement in a way to write the rules um or to enforce rules that hadn't been written. Um and you know there was a lot of despair for

a lot of people who were on the other on the receiving end of that but also as a regulator as someone who whose job it is to come up with rules um and then enforce those rules in a way that's that's fair and reasonable. Um that was also very frustrating. Um along the way, um I worked on on a draft safe harbor that I got a lot of input and help from people in thinking about what would good regulation in this in this space look like. Um I did a couple iterations of that safe harbor.

But then to get to a point where something like that is more than just something that I put out and say I think this is something we should be doing, but it's actually there's a chairman at the agency who says, "Okay, let's actually write some good rules." Um, it's it's really a very nice position to be in to have the ability to to try to get some stuff done. And I think the the task force already has gotten gotten a lot of good work done. But as you say, there's the this um the chairman gave a speech this week and the the pace I think is is picking up. Um and it's very rewarding. Now, at the same time, I think part of the the difficulty always is uh writing rules is very hard and

there are a lot of really difficult technical and legal issues that we have to deal with. And I think there are a lot of um difficult conversations that still lie ahead. Um and so it's by no means um coasting from here. >> Yeah, certainly. Um just earlier today we had a member of the blockchain association which has sign several member companies as part of it. Um all lobbying for positive uh regulation. Consumer protection is is a big part of this. Um, and one of the most interesting points in that conversation that I found was the idea of of identifying who our adversaries are. Um, and so for a long time, you know, the there was an administration that, like

you said, was ruling through enforcement. Uh, now that seems to change and and now we're we're supporting innovation. Uh, there's also the banking lobby that was starting to stifle some of this innovation. I'm I'm curious if um if you don't if it's a I if you know you're putting together sort of this landscape within DC who who do you find your your opposites are if you were to steelman their arguments right I think all of us here we support innovation we we know what this technology is capable of and and we're focused on empowering people with these techn technologies uh but doing it safely so that we don't put anyone in harm's Okay. Um, to me that seems like a very uh simple straightforward thing to

do, but there are people on or groups on the other side of this. So, I'm just curious if you were to steal man what the anti-crypto argument is these days. Is it it does is there still one? Does it still exist? If so, what what is it? >> Yeah, I mean, there definitely is still an anti-crypto argument. And I would say it's good for us not to think about these issues in terms of of adver ad adversaries maybe, but this is part of the democratic process, right, of Americans getting together and figuring out what do we want regulation to look like? And and this is this is a theme that I've tried to um talk a lot about during my time as as commissioner. It is so important for people to look at government and say this is my

government. I want my government to work for me and this is what I would like the government to be doing. Now other people might come along and want it to do something different. So then that has to be mediated somehow. But I think that the the arguments that are that are really cautionary about what is happening now in in terms of cryptoregulatory policy are raising some fair issues, right? They're saying that people need to be careful when they're they're buying these things. There's a lot of there can be a lot of hype as we all know around crypto and that hype can get people um really excited about putting money in and buying buying crypto assets without really spending a lot of time thinking

about is this money I can afford to lose? Is do I understand what this crypto asset is? Do I understand where I'm holding it? Um am I am I self-custodying or am I holding it through an intermediary? might that intermediary be doing something with my asset that I didn't authorize that intermediary to do? Um, and so there are there are fair questions to ask. And then unfortunately, as we know, whenever something is popular, there will be people who will take advantage of that. And so, as I said, I've been answering phone calls during the shutdown. And and some of those phone calls have been from people who thought they were going to make a lot of money in crypto and instead really got hurt. and and so as

people who care about the technology who are interested in seeing it being used uh more broadly you know it's it's really important to also think about what can we do to combat some of these bad practices. >> Havachi is fast and private per [music] trading secured by ZK with Celestia underneath. Go to habachi.xyz [music] to start trading today. Not your keys, not your coins. From the team that pioneered cold storage, Treasure has just released its new wallet. Guys, if you are still using hot wallets in 2025, 2026, you are missing the [music] entire point. Secure your coins. Get a Treasure at treasure.io.

>> Yeet is built for big moments, the most fun you'll ever have with your crypto. Go to yeet.com to yeet into your next game. Yeah, I mean I I I I mentioned that to the blockchain association CEO today just how the you know it's tough to overestimate the impact that uh you know the FTX era of the space had on the public perception. Luckily we we've had stable coins has been a massive public perception boost as well as a boost of confidence for the US uh financial kind of outlook w with regards to the US dollar dominance and kind of extending that globally. But we've been kind of still fighting this uphill battle of um the early remnants of it's almost

similar to the internet era of these different types of of um you know get-rich quick ideas or bad marketing bad practices. And so, you know, I think a lot of this a lot of what what we've struggled with as an industry has came from uh the lack of regulatory clarity, right? There's this idea that we've been pushing a lot on our show. Uh return to fundamentals and and a lot of this is really just about using the technology that we have here to build businesses on chain to, you know, re redefine capital formation. um to create private hard money that is, you know, censorship resistant, that gives people self-s sovereignty. A lot of these things we the industry kind of opted out of uh in

favor of basically creating many different types of vehicles to uh evade this this arbitrary uh law or this arbitrary regulation. and the the benefits and the upside of of having clarity um are already being felt and will continue to be felt. And I mean we've we've got the genius act behind us. We're looking forward to the market structure bill, the clarity act and more. I think that that you know this capital for formation idea is something that you've been uh correct about, right? you predicted that capital formation would be at the top of people's minds um with regards to blockchain and and crypto. Um you know

you know I think you on a previous speech or podcast you asked kind of why we don't why we have so few public companies in crypto um and we've seen this IPO kind of boom as of recently. I'm curious about this specific capital formation tokenization and the kind of publicization of this industry. Why do you think we still have so few public companies? You know, what what has been the root cause of that? And and frankly, we've seen that trend shift. How do you see this playing out in 2026 with regards to, you know, the the crypto markets going on on the biggest stage and creating these large public companies?

>> So, there's a lot in that question. So, so couple things. Um, first, um, I I think that you're absolutely right that the the lack of regulatory clarity led to some really bad, um, things happening that would not otherwise have happened. One of those things is that um people ended up building things that were not intended to last because if you built something that was intended to last, you could end up putting a lot of time and effort in it only to face a government enforcement action. And so that ended up creating just bad incentives. Another thing it

did it the lack of clarity here in the US did is it it encouraged people to go and and build things outside of the US and it encouraged US people who wanted to get access to crypto to go outside the US to get access to crypto and then obviously you don't have the same regulatory and legal framework protecting you there. Another thing I would say is that one of the when we have seen problems in crypto, one common theme is that there's often a centralized intermediary that is doing something bad with someone else's money or someone else's assets. And that is a good reminder to all of us what this technology enables, which is disintermediation, taking away those

centralized counterparties that might do something bad with your assets. It's not to say that the entire world is going to become disintermediated, but it is to say the technology is there in part to solve some of these problems. And so um people should remind themselves of that core that core principle. Now with respect to the public company issue, I mean the public the the der of public companies is a broader issue than crypto. oods. The US has has been um for a long time the envy of the world when it comes to raising capital. Investors want to come here. People who want to build companies want to come here. They want to do it in the US and we want to keep it that way. And traditionally

getting your your company listed on an exchange in the United States was really a something that companies wanted to do. That was that was a a goal for them. Um, more and more companies are deciding to stay in the private markets where you can raise a lot of money, but retail investors don't typically have access to those companies. And so, we do want retail investors to have access to as much of the growth as possible. So, we need to think about how we can get them access to some of that growth that's happening in the private markets, but also how can we encourage companies to move into the public markets. there has been a bit of a trend in the in the uh crypto space. Um we've seen a lot of uh digital asset treasury companies and

these kinds of things. Um you know and again I think with many as with many trends in in crypto people need to be careful and they need to not just assume that they should jump on whatever bandwagon is out there. It's really important for people to understand when they're buying things what the risks are associated with it as well as what the prospects and opportunities are. And so that's the role of the SEC when it comes to public companies. We work with them to make sure that they're getting their disclosures right um and that those disclosures are reflecting what the risks are. Um but as you say there is, you know, we we do want companies of all kinds to to um come to the US to to raise capital and we want investors from

all over the world to come here as well. I I take it you've you've probably thought a lot about um what a model could look like when it comes to a public company with an equity or stock on a on a regulated exchange and also one that has a token that may be trading on centralized exchanges, decentralized exchanges. And I think this is where we're really craving the Clarity Act and the Market Structure bill because there are companies in this position right now. And the most that they've given us up until this point is that they're starting to explore a token. This very vague, you know, indication that they do want to do something, but they're not quite sure how. Um, I I realize like you said in your disclosure, you don't speak

on the behalf of other commissioners, but is is this a p do we see a path to ultimately lay out some some rules of the road so that companies that are public can also offer tokens? Do you see this as something that could potentially shake out in the coming legislation? >> Well, so there are a few things there. first. I mean, if you're talking about a company that that is public taking its shares and tokenizing them, that's an issue that's gotten quite a bit of interest again since we since 2025 happened and and the the change in attitude in in at the SEC happened. a lot of traditional financial companies uh a lot of a lot of

cryptonative companies came in to talk to us about this idea of tokenizing public equities and and I think that we will definitely see um experimentation along those lines. We're encouraging people who want to experiment along those lines to come in and talk to us um so that we can get those experiments running and with the idea that eventually, you know, we'll get to commercial uh viability. Right? This isn't intended to be an experiment that we run for a few months and then shut down, but we want to get to a point where we can work into a set of rules that govern tokenizing of securities. I think there's a separate question around a company that's public and has shares trading out there deciding to create a

token for some other purpose. So you have on the one hand you have your shares and on the other you have your token and again there may well be be room for that but I think we really need to understand and and and people buying those tokens need to understand what exactly are they getting a claim to? what is that what does that token represent? And I'm hoping that now that um there there's an understanding that the SEC wants to work with people that that people will not necessarily run from the idea of having tokens that are securities.

>> Those securities either have to be registered or they have to be exempt from registration, but we're willing to work with people on on that. Um, and so maybe we'll see more creative ways of using tokens to actually give token holders rights to certain revenue streams um or certain claims on assets. And um I I think that's an area that we'll see some experimentation in as well. >> Yeah. Yeah. I think some some of the notable examples there are Circle has announced their ARC token for their ARC blockchain which is affiliated directly with Circle. Coinbase is also thinking about exploring a base token which is obviously the L2 that Coinbase h you

know maintains and so these are two publicly traded companies. Then you've got securityize has came out with this spa announcement where they want to tokenize the equity of this of their public company but this is probably fits more into bucket one that you mentioned and the and the and the former two probably fit into bucket two. And so it's just feels like there's this interesting time period here where uh it's you know this idea of having both a publicly traded equity and not a tokenized version but a separate token is a unique novel concept that we've not yet seen. Um and so this kind of begs the idea of what comes with regards to how these are treated and what investors are really getting. How does it fracture the value of each of of the equity

versus the token? There's a lot of >> no you're raising I think you're raising really important questions there and that's why we need to you know people who are thinking of doing that need to consider is that token a security of some sort. Um and and people who are equity holders in in those companies need to understand what the token holders have a claim to versus what they have a claim to the equity holders. So there are a lot of disclosure issues that really need to be thought through and legal structure issues that need to be thought through. Uh and so again we welcome people to come have those conversations with us.

>> Yeah. Yeah. Commissioner Pur, I think one of the interesting ideas that has came out of uh 2025 and really the end of last year is that a lot of these crypto assets are actually not securities. They've been labeled more into the commodity bucket. And so Robbie and I again, we had the CEO of the of the chamber uh of it was the >> the digital chamber of commerce >> digital chamber of commerce Cody on in person in New York and then today Summer from the blockchain association. Talk to them both about this. So very curious to hear your opinion with with this kind of uh rule or uh concept being known now that crypto assets are the majority of them are not securities.

Does that shift jurisdiction of this industry into the CFTC's hands kind of out of the SEC's hands? How do you see these two agencies uh collaborating? Rob, maybe you can >> I think that's exactly the question. I I took a look at uh the clarity act proposal that was put through by the department of I think it was the agriculture department and uh and this was one of the things that they had outlined and it was consistent with uh chairman Atkins and and what he said uh in his latest remarks which was that most of these tokens are not securities um and therefore should be regulated by the CFTC and so similar to what uh Andy's asking you know just curious I think it's very clear and obvious that

these two agencies your agency and and the CFDC uh would work hand in hand. And so I'm curious with the shift towards the CFTC as the main regulator of tokens, what are the ramifications of that? And then similar to Andy's question, how would you collaborate with the CFDC to maintain proper regulation over these tokens and digital assets? >> Yeah. So the Clarity Act is the House's version of the market structure legislation and the Senate is also working on a version and and and as you mentioned the the there's interest from both the the House Financial Services Committee, the Senate Banking Committee, but also the Agricultural Committees and both the Senate and the House. Um

because there is this this question of what goes to the CFTC which is under the A committees and what goes to the SEC which is under the banking financial services committees. Um, and I mean I I think it's funny that people think it's a news flash that most crypto assets are not securities. I I have uh been of that opinion for a long time, right? >> I think we we knew this but we were told that we were wrong. We were scared. >> You were and and you got that from uh my own agency in fact kept saying that. Um but I think that later it may be the case that many tokens are actually securities as we talked about before.

people may not run away from the idea of creating tokens that are securities. And so it could shift and you could see lots of tokens ending up actually being securities, but I think many of the tokens that we think of today um are digital commodities. And so the the CFTC now has authority over futures markets, but also over spot markets when it comes to fraud. Um, and then the bills that are out there are likely, you know, if they if they get enacted into law, they'll likely be direct spot authority at the CFTC. Um, and, you know, I think that's that's completely fine. We do want it to be possible for entities we

regulate to engage with spot crypto on behalf of their customers. Um, that shouldn't be a problem. our entities are regulated already. So I don't, you know, I think having the ability for us to continue regulating those entities makes sense even when it comes to spot crypto. But having the bulk of the authority at the CFTC um is is a perfectly fine outcome. We are happy to work with the CFTC. We're we've made um efforts recently to really restart the the efforts to not only work together, but to harmonize our regulations.

um my colleague uh the chief counsel of the of the crypto task force is um being has been nominated to be the chairman of the CFTC and so that's obviously quite helpful because we've been working together now for for um quite you know for most of this year and so I'm very excited for him um but I think that there will still be a role for the SEC to play in capital raising that's our that's our bailey wick And as as you know, you can take something that is not a security and you can combine it with an investment contract and sell it to raise money and then that would be a transaction that we

would regulate. The the part of what we want to do is make sure that we're not um creating awkwardness when it comes to that that >> token trading on CFTC platforms. And so that's something that the legislation will address and that will address in our in our regulations. Um, and I'm really quite optimistic that however Congress ends up allocating authority, we will um be able to make it work. >> Want simple, want fast, want every chain? Use Relay.link. The fastest [music] bridge in crypto. Transfer your assets crosschain instantly with very low slippage right now on relay.link.

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I'd love to hear more about you and Paul's relationship and just kind of how that's going to grow and but you've just brought up such a a interesting point around capital formation. Again, I I keep kind of harping on this as that is where the SEC is going to be most involved as you've mentioned and also what I find to be one of the most unique and and interesting parts of the entire you know blockchain web3 uh you know ethos and idea is this idea of capital formation. And so, you know, you were around during the ICO boom of 2017 and 2018 and used all the fallout of that.

We've recently had the reintroduction of the ICO idea. It's come through platforms like Echko, like Legion, Sonar, a couple of these others. Coinbase actually just recently acquired Echo for about 400 million. I think it was 3 375 million. Then they've now also launched their own kind of ICO platform. ICOs are back. Commissioner Pur, whether we want them, love them, hate them, they are back. The question is what is what is going to be the evolution of the ICO as we've as we know it now versus kind of where you think the regulatory um body will allow, right? Because the idea is right now the rhetoric in the space is that crypto VCs get in early, they

pump narratives to people, they sell their assets, and they're the only ones who win. retail's left hole in the bag and everybody is upset. So naturally, what happens is is the market goes, "Okay, we're going to open up these ICOs to people at a better valuation, better terms, and give it to the average folk as long as they're an accredited investor in the US and are willing to have a one-year cliff in in terms of actually getting the tokens from the from the the time that they purchase them. or if you're outside of the states um you know there's kind of different more relaxed uh requirements I guess high level here what is the state of ICOs from the from your perspective how it how uh encouraging are you personally

about this development coming back to the space with regards to crowdfunding with regards to these initial coin offerings and um yeah I mean would you like to see this space continue to grow and thrive um as far as capital formation goes Well, if someone wants to use a token um wants to do a capital raise in connection with a token, I want them to do it in a way that's compliant. And so that means um including disclosures that people need to get. Um and and so that's something that we're working on providing a framework for. Um, but you know that really is important for everyone to coalesce around this idea that people buying these these tokens need to understand what it is they're

buying. And I've always believed that it's important to be able to have wide distribution of tokens if you're trying to build a network so that people can actually use the, you know, you can get network effects, more people can use it. So I think that's natural. I I'm not a fan of the idea of just doing a token capital raise for the sake of raising a bunch of money and doing nothing with the token. So I I I think one theme that came through in in Chairman Atkins speech the other day was that you know the idea is if you're going to if you're planning to build something out and you want to sell the token in connection with that, you're making some promises to people about what your efforts are are going to be. I mean, the whole idea

of an investment contract is that someone's investing money with the expectation of profits based on the efforts of someone else. So, so tell people what those efforts are and then go fulfill them. Um, and and I think we want to set up a framework that encourages people to be clear about what their their promises are and then to be clear about fulfilling those. Um, and and so if we get the incentives right, I think this is fine. Um, and I just I just hope people as always are are paying attention to the fact that that disclosure and and integrity are important.

>> Yeah, of course. Yeah. Yeah, I mean I think this was also a concept part of the of what we spoke about earlier with regards to the way that the market was formed in the space was very uh effectively venture capitalist driven because that was the way to do it successfully in the previous regime with this arbitrary kind of rules and that was like the clear path. Um it just seems like now there's a bit more experimentation possibilities uh which we we're now seeing and it kind of sounds like you're encouraging that but in a safe you know trustful you know >> consistent with the securities law >> right it's not the wild wild west just because Trump's in office guys like you

know what I mean? >> Yeah. I mean I I really do want people to know that um you know we have securities laws and we have to enforce them. we are we are very willing to work with people um and we really do encourage people to to take us up on that. >> One of the things uh important to ICOs is this idea that it's democratizing access to the private capital formation part of a of a company's or or token's life cycle. Um this is consistent with um generally what you're seeing these days is that people are getting involved in their own finances at a much younger age. they're taking control of their own finances. They're not trusting a financial adviser. Um, and and this is

part of the internet movement where it's very self-s served. You know, we have the wealth of knowledge at our fingertips and and we can go and learn everything that's online. Um, really in the in, you know, in an instant. Um, and and thus we're taking our financial education into our own hands. I I'm curious what you think could be the consequences of this as more and more people are taking control of their own finances. They're potentially getting into a situation where it could be nihilistic. We're seeing sports gambling on the rise. Um memecoin trading is something that happens in the crypto world that is very distinct and separate from a lot of the institutional adoption that we're seeing play out. H how are

you um how are you helping democratize access to these financial markets but making sure that we do it in a safe way? Do you think generally we're we're headed in the right direction and we're on the right trajectory? Um there are some pitfalls along the way but um this hyper financialization generally this trend what what what do you think about it? Well, I do think you're right that that things have changed since the securities laws were written, for example, and that it's it's actually a lot easier now for people to get information and to do their own homework and um they can get information from lots of different sources. And that's that's a great thing. And I think it's it's wonderful that people are interested in taking their own finances

um under control and they're trying to to get their arms around it. They're seeking out education. That all is good. Um I do think there are times in people's lives where many people will decide that having the help of a financial adviser makes sense and that's and you know people are different too. Some people are much less interested in in thinking about these kinds of things and for them it might well make sense to to um get the help of a financial adviser or go uh invest in standardized products like ETFs and and mutual funds and and so it's not a one-sizefits-all regime. I do think we need to start financial education much earlier because as you say everything is at your fingertips now and it's much easier to to trade all kinds of things and so

getting people educated so that they're on the lookout for red flags um because often you know bad actors they may couch their their fraud in the name of crypto or they may couch it in the name of AI or something else but they're often red flags that are consistent through all of those things. So getting people to be aware of those. Um and then the other point I would make is that you know again I'm someone who who who tends to approach things. People have a right to live their own lives. They have a right to make decisions for themselves and their families. But with that decision-making right and and that sovereignty over yourself comes the responsibility too to to make wise choices because if you make bad choices, there's not someone there to bail you

out. You you you have to you have to make decisions. You have to think about how much money you can afford to lose. And I do think people also need to understand the difference between investing and and and trading for fun and pleasure and and short-term uh potentially short-term profit, potentially uh uh long-term loss, right? People need to really be distinguishing those two things. If you're trying to save up for a house, you have to do that in a way that is is careful and and uh and and if you're if you're taking some of your money and you're deciding you want to you want to just um you know have have a have a nice time investing with it, but you're not expecting to to

to save up money for something, that's fine. But you have to go into it knowing what you're doing. And people can get very caught up in hype and they can get thinking, oh, the market, it's always going to go up and um they can end up very leveraged because they think the market's always going to go up and then when it goes down, they can end up really wrecked and it can be really a problem. So, I just encourage caution. I'm I'm very happy that people are are interested in investing in financial markets, but I also think people should be very cautious.

>> Yeah. Yeah. Yeah. I mean it we all have battle scars, you know, from the cycles, one way or another. >> We do. >> And and I think one thing that you're super uh, you know, strong on and you have a very strong opinion on that I think our audience is also a part of is this basically this idea of self-custody. Like I think in crypto you you can avoid a lot of the the downfalls even though it's a lot it is a big responsibility to have a hardware wallet to to own your own uh keys and things. You avoid a lot of the pitfalls in crypto by avoiding a lot of the trust me bro situations. You know those are the ones kind of where you get burned.

You've called yourself a freedom maximalist in the past. I I'm I'm curious like what does that actually mean and and why is the right of to self- custody of digital assets so important to you personally? >> Well, I'm a freedom maximalist because I think this country is built on the idea that people um each individual is uniquely valuable and has a unique ability to to to to understand what her hopes and dreams are and to make those those happen. Um she just needs the freedom to do it. And so government shouldn't try to live people's lives out for them. Government should really be there to build a framework within which people can can make their make of their

lives what they want. And obviously that's not just a an individualist mentality. A lot of people get great joy from from helping other people live out their best lives, too. And so this is this is a way to figure out how to maximalize people's freedom to to give to the community their unique talents. And so why does self-custody come into something like that? Why shouldn't I have a right to hold my own assets? Why should I have to be forced to go through someone else to hold my assets? It's not going to be for everyone, but there are a lot of people who want to have control over their own assets. And I think we I mean it to me it it it baffles me that in this country

that is so premised on freedom that would even be an issue like of course people can hold their own assets. >> Yeah. >> Um and I think that that is you know that issue is is is really important to me the self-custody issue but more broadly than that the privacy issue is so >> thank you for bringing it up. Um because people in this country have a right to keep their financial transactions, their personal interactions private >> absent suspicion that they're engaged in some kind of illegal activity and then there are ways for a government to get access to information to bring a case. But the presumption is that people are going about their daily lives just doing their thing and it's nobody else's business

what they're doing. Um, and we have seeded that here in the US and I think it's it's a moment where we really have to reclaim that. >> So, is this the the Zcash bull thesis here? >> I'm not going to talk about any particular asset. I'm just I I just think that >> messing with you. I know you're messing with me, but I think there's a there's, you know, we really have to to recast the narrative around privacy mechanisms >> because it has become um and I, you know, I've said this in a lot of places, but it has become the presumption that if you want to keep your transactions private, you're doing something wrong.

But it should be exactly the opposite presumption. I uh Commissioner Pur, I I first met you in the University of California, Berkeley after you had given your uh speech on watermelon and peanut butter. >> So fired up about that. >> Yeah. >> Watermelon and peanut butter. to maybe tell tell people for for you know those who weren't there just give us a synopsis because it's it's such a funny title and that's why I do think you have a sense of internet sense of humor in you and I maybe you could just give give some people uh some context on on that speech and why it it really does help put into perspective why privacy is so important.

>> Yeah. So I mean I told the story of my grandfather who had a pension for eating peanut butter on his watermelon. not a not a good plan, but he was he was making a phone call um through an operator at that time and the operator was like, "Hey, are you Mr. Purse, the one who eats peanut butter on his watermelon?" And my point in that was that um you know that is really like it was a funny story and he didn't mind it but it it's when you have an intermediary like a telephone operator they know your business and like so yeah my grandfather was making an innoc innocent call but but maybe he could have not wanted this person who knew him to know who he was calling. And so I think in the in the financial context, we we of course have

the fourth amendment that that we all know protects us and and uh it protects us from government searches. Um but when you give your information to a third party, that protection falls away. Um and so that's the third party doctrine it's called. And so effectively all of your financial transactions are open for the government to look at because you're dealing with an intermediary. And so I I think that we have to revisit that issue. But the interesting thing about this technology is that because it enables us to disintermediate um it actually kind of is a uh protection against that third party

doctrine. Um, and and so even more with all of these interesting new privacy technologies that people are coming up with, I think we can take this as a moment to reassess this whole approach that we've taken. >> Yeah. So, we just have a couple minutes. We'll do a little rapid fire here if you're cool with that. Uh, I have some I have some tweets and some takes I'd like you to react to. I'm sure Rob does, too. Balagi put out this uh podcast I think with Merd or something and there was this clip that was like the three eras of crypto proof of work 2009 to 2017 programmability 2017 to 2025 privacy 2025 to 2030X agree disagree to is it more nuanced

than that what's your take >> I think it's more nuance but I I think those those themes are are important of course we still see some proof of work we still see uh programmability ility being you know I think especially as tokenizing of securities comes on online programmability is going to be a big theme. >> Yeah. Um what is the latest with project crypto? We are back, as you said, we're back um from the shutdown and so we're working hard to get some rules out to get some exemp exemptions out um and we're still eagerly trying to talk with people and then just to take it back to privacy, we do hope to we we had to cancel the privacy round table because of the shutdown, but we hope to have that uh

happen. >> Nice. Um ETFs are kind of all the rage. A Ripple one went live just today. the the biggest one superseded Salana. Um there's a whole onslaught of ETFs that are in the pipeline. Um big deal, not a big deal. What's the reaction to the ETFs? >> Yeah, I mean I think that um we'll see what my view always is. Let's see what the market says of these things. But I do encourage people again to just be be careful what you're what you're buying. Um make sure that it fits with what your portfolio is, what your risk tolerance is. And then, you know, it's up to the market to decide.

>> If the SEC and the CDC get digital assets regulation right, what will shock Americans most about the the future of their day-to-day of the financial world? What what do you anticipate being the biggest wow moment for Americans in their day-to-day life? I think the biggest wow moment is when we find people who have been real critics of crypto assets just across the board finding that they're actually using them in their day-to-day lives. >> Similar question type followup. What is the biggest misconception that you're still hearing from institutions, banks, payment providers?

>> I think sometimes they think about things as being a zero- sum game. Um, and part of what I think is interesting about this new technology is it does allow us to reconsider some of the rules that we have in place and that could be very helpful for traditional financial institutions as well as cryptonnative firms. >> Yeah, there's a entire generation of founders who see you as this rare ally in the government in the in the in the SEC task force. If you could say one thing to the entire crypto and finance community founders entrepreneurs what what would you tell them?

I mean, thank you to those of you who are trying to build really interesting products to meet actual needs because you embody the American spirit and you've persevered through some extremely difficult circumstances and I just admire the bravery of people who who were willing to build in that kind of environment. >> Um, prediction markets, securities, commodities, um, these things are taking the world by storm. Is it gambling? Is it investing? General, what's what's your take on prediction markets?

>> You know, I got to give you a lawyer's answer. Depends. [laughter] >> Okay. Okay. Fair enough. Um, yeah. >> What is one question about the SEC or crypto that you wish media asked you more often? >> Um, I wish that people asked me more often. What does the SEC do besides crypto [laughter] which is a lot. >> Well, we might as well. I we got to ask the question then. So please you know give us you know there there is a lot capital formation securities in general but what what are some of the other focus areas outside of crypto?

>> Yeah I mean we regulate investment advisors, broker dealers, exchanges um we we work with public companies as they're making we talked a little bit about this but as they're making disclosures and and mutual funds and exchange traded products. So there's a lot of review there. And I think I'd also like people to ask me what is not your jurisdiction because almost always when something bad goes wrong, people say, "Oh, where was the SEC?" And half the time or probably 80% of the time, my answer is, you know, that's just not Congress did not give us authority to go after that bad activity. It is bad, but it is just not ours to go after.

>> Yeah. Last thing from me. Do you think your family will ask you what to buy at the Thanksgiving table? >> [laughter] >> That's why I'm going to try to avoid my family. Um, no. You know, I come from a family of very independent-minded people and so they don't need to ask me. They do their own thing. >> That's good. [snorts] >> First, >> I got one more. What is What are you most excited about going into 2026? I'm really excited to get some actual um rules out the door and um and and I'm excited to see, you know, that might be in the context of of the market structure bill that might be um also just our independent rulemaking and I'm I'm really excited to see that.

>> Awesome. Thank you so much. And we we really really appreciate you coming on and spending the time uh to to chat with us and we are equally as excited uh for that uh to come in 2026 and all all of the innovation. >> We want to know >> when the market structure bill is coming. That's all that's what we keep getting asked when >> political predictions. [laughter] >> That's a 2026 episode. >> I I appreciate you guys uh taking the time. It's been fun talking to