Fireside Chat: SEC Commissioner Hester Peirce

Thank you.

Well, thanks Miller, and it's an honor to be here with you. I do have to give you my disclaimer: my views are my own as commissioner, not necessarily those of the SEC or my fellow commissioners. I mean, I think I really am proudest about the people that I've brought on onto the task of doing crypto regulation and other types of regulatory policy. You know, as a commissioner, you're only there for a short period of time. Mine maybe longer than some others, but still, you're only there for a short period. And so you really have to seed the ground with people who are going to carry on and do greater work after you leave. And I think that's something that I've done.

There are a lot of wannabe securities lawyers. That's not what I would have envisioned when I took the job that people on podcasts all over the world would be talking about the Howey test, but you know, you take the limelight when you can get it, right? I guess if you're a securities nerd.

If I could do it over again, would I have done things differently? Sure. I would have had a fully-fledged regulatory framework ready to propose when I got the chance to do it. I have really appreciated the willingness of people to work with me to think about what the framework should look like, not with me alone but with the SEC. But time is of the essence. And so that's something that, you know, if I could have done it perfectly, maybe that's what I would have done. But I think now we're at a place where we've gotten the chairman just mentioned red crypto assets out, and that was a huge accomplishment. Getting the transfer agent rules out, which commissioners were 10 years ago telling us were overdue, that's a huge accomplishment. But there's more that we need to do to make sure that we're protecting, as we were just talking backstage about this, right? Protecting the right of people to actually sit down and develop tools that they want that other people will want to use. That's something I care a lot about. I care also a lot about protecting the ability of people to develop privacy-protecting tools. I care about the ability of people to use decentralized tools without an intermediary in the United States. And that's something that I think we've got a lot more work to do on. So I would love to see protections there, not trying to force an intermediary in the middle of every transaction. And if I were leaving with greater protections around that, I would be a happier woman.

I mean, I think people never realize how slow things are to move in government bureaucracies, and there's a reason for that. You want to have things be deliberate. And so, even though I open by saying I wish I had started with kind of a fully baked proposal that I could have put out there that covered all these things, in reality, we have benefited so much from the rounds that we've had, from the input we've had, from the back and forth and meetings that we've had with market participants. And things just take a long time. We have excellent securities lawyers at the SEC who are thinking about it from a lot of different angles. And that means that you're never going to see things happen as fast as you'd like to. And that I think belies the fact that behind the curtain at the SEC, people are working extremely hard. And so I do want people to recognize and know that. And that's people on the staff who I think for years were told you can't use your creative mind to try to address this new industry and this new technology, and once they got the green light to go ahead and start thinking creatively, they did, and they really poured themselves into it. And so I think people don't always realize that.

Yeah, I mean I think a lot of people have really gone above and beyond, and we just got two submissions this week, which, you know, both very substantive, or within the last week, very substantive, and so people are still engaging with us. I mean I think there are areas where people could have maybe been thinking about the inevitable securities laws implications earlier. But part of the reason that people I think have been loath to do that is because of this history of dealing with an agency that really, I mean, there's some PTSD there. And so I get that. And I think that's, we're trying to turn around that view, and we're really trying to get to a place not where we regulate everything for the sake of regulating everything, but where we decide, yeah, this is an area where we actually do have an intermediary who could take your funds or be careless with your funds. And so we need to have a regulatory framework around that. But here's an area that we can clearly carve out or which frankly just isn't in our jurisdiction. And I think people have been helping us think through that, but we continue to invite people to do that. And I can't take credit for that process. I mean, that's something that folks on the crypto task force, Chairman Atkins has been, as you heard, very supportive of this, before him, acting Chairman Uyeda was very supportive. And so, it's really taken the whole commission to come together and turn this ship.

I mean the message that I give is build things that are useful that people want to use, and that is your best protection at the end of the day because when people are using it, it's hard to turn it off. But I think we are in a world where our nation now is much more risk-averse than it used to be. And I think it really is important as people who care about solving big human problems that we remind our fellow Americans that the thing that made this country so good at solving human problems was that we welcomed risk-takers and we welcomed the idea that sometimes they would take risks, they would build businesses that would fail and we would let them pick up and start again. Sometimes they built things that had adverse effects that, you know, none of us want. But the understanding is that sometimes things do have to, some bad consequences have to happen in order to get the bigger good consequences that we're achieving. So I think really building into our culture a new appreciation for risk-taking, a new appreciation for the ability of human minds when they set themselves to it to solve large human problems, and especially when they can work with other people. And that's something that this technology is so good at unleashing, the ability to work with other people through a technology that enables you to do things even if you don't know who you're working with in building something. And so keep up the campaign of explaining the value of being able to take risks to solve problems.