The Virtual 2021 Aspen Security Forum: Day 1

Thanks. Thank you so much for that kind introduction, Anya. I look forward to the discussion with Paul. Thank you, Nick, and others who invited me to speak here at the Aspen Security Forum. Now, as is customary, I should note that these views are my own and I'm not speaking on behalf of the Commission or the SEC staff. All right, I got that out of the way. So, some might wonder: what does the SEC have to do with crypto? And further, why did an organization like the Aspen Security Forum ask me to speak at all about crypto's intersection with national security? Let me start at the beginning. Many of you might know it who are listening, but it was Halloween night in 2008, in the middle of the financial crisis, when Satoshi Nakamoto published an eight-page paper on a cypherpunk mailing list that had been around and run by cryptographers since 1992. A little off the grid, a little libertarian cypherpunk mailing list. Now, Nakamoto, we still don't know who she, he, or they were. If at the end of this talk Paul wants to tell us, I'm looking forward to knowing who Paul thinks Nakamoto was. He wrote: 'I've been working on a new electronic cash system that's fully peer-to-peer, with no trusted third party.' You see, at the core, Nakamoto was talking about some form of private money that didn't have central intermediaries. But Nakamoto had solved two riddles that had dogged these cryptographers and other technology experts for a couple of decades since the dawn of the internet. First was how to move something of value on the internet without a central intermediary, and that's where it can fit into national security: how to move something of value on the internet without a central intermediary. And relatedly, how to prevent what's called double spending of that valuable digital token. So subsequently, his or her innovation spurred the development of crypto assets and what's called the underlying blockchain technology. About a dozen years later, where are we? Well, the crypto asset class has ballooned. As of yesterday, about 1.6 trillion dollars of value. Of course, it goes up, it goes down. Over 75 tokens worth at least a billion dollars each, 1,600 worth at least a million dollars of market capitalization. And while that 1.6 trillion is relatively small compared to the U.S. capital markets of nearly 100 trillion dollars, it's still significant. And of course, it's larger than the capital markets of many jurisdictions that this security forum would discuss. And before starting at the SEC, I was honored, as Anya said, teaching about the intersection of finance and technology at MIT. This included courses in these various topics, and in that work I came to believe that though there was a lot of hype masquerading as reality in the crypto field, Nakamoto's innovation is real. And some in the public sector would say, 'Well, no,' almost like wishing it away. I really do think there's something real about the distributed ledger technology, moving value on the internet without a central intermediary. Further, it has been and could continue to be a catalyst for change in the fields of finance and money. At its core, Nakamoto was trying to create a private form of money with no central intermediary. We've had a long history since antiquity of private monies competing with public money, so this is not necessarily new, but it was new how it was done and how it can live in a digital age. Now let me say, we already live in an age of digital public money. It's a dollar, a sterling, yen, and yes, yuan. All are digital. And if you had any doubt about that, it's obvious during the pandemic. I mean, who is actually using paper or coinage money these days? So such public fiat monies fulfill the three functions of monies that monetary economists have studied for a long time: store of value, unit of account, medium of exchange. Why do I raise that? Because my opinion is no single crypto asset, though broadly, fulfills all of the functions of money. Bitcoin has some of it, but not broadly fulfilling all three. Primarily, crypto assets provide a digital, scarce vehicle for speculative investment. Thus, in a sense, one can say they are highly speculative stores of value. By Bitcoin, it goes up, maybe I have something better for my future and my retirement, but it's not really being used as a unit of account. And we also haven't seen that crypto has been used much as a medium of exchange, except for one large exception. To the extent that it is being used as a medium of exchange, it's used usually often to skirt our laws with respect to anti-money laundering, sanctions, tax collection, on the dark web. And yes, also it's enabled extortion via ransomware, as we've seen recently in Colonial Pipeline and elsewhere. You see, with the advent of the internet 40 years ago and the movement from physical paper money to digital money, we nation-states around the globe layered various public policy goals over our digital public money system: sanctions regimes, anti-money laundering, tax compliance. We did that sort of in this digital public money area. And that's what to some extent people are using as a medium of exchange in crypto. Now, as a policy matter, I'm technology neutral. I would say as a personal matter, I wouldn't have gone to MIT if I weren't interested in how technology can expand access to finance and contribute to economic growth. And I wouldn't have spent so much time around the Digital Currency Initiative at MIT and my colleagues there if I didn't think there was something here that could be a catalyst for real change. But I am anything but public policy neutral in my current role. As new technologies come along, we need to be sure that we're achieving our core public policy goals. And in finance, what's that about? Protecting investors and consumers, guarding against illicit activity, and ensuring financial stability. And that's where it fits into national security interests. But how does the SEC fit into it? And I'll close with some thoughts on national security. But the SEC, well, we have a three-part mission for those who aren't familiar: protecting investors, facilitating capital formation, and then in between, maintaining fair, orderly, and efficient markets. Investors, capital formation, and then the markets in between. We focus on financial stability as well as part of that fair, orderly, and efficient markets. But at our core, it's about investor protection. And if you want to invest in a digital, scarce, speculative store of value, that's fine. Good faith actors, by the way, since antiquity have been speculating on the value of gold and silver, so that's been around for thousands of years, right? Now though, in this digital, scarce, speculative asset, Bitcoin and others, we just don't have enough investor protection. And frankly, at this time, it's more like the Wild West than some sort of protection against fraud and manipulation in the space. This asset class is rife with fraud, scams, and abuses in certain applications. There's a great deal of hype and spin about how crypto assets work, and in many cases, investors aren't able to get rigorous, balanced, complete information. It doesn't mean there aren't good faith actors, and there are many of them, but investors really aren't getting the information to judge the risk and understand the risk. And I fear that if we don't address the issues, I worry a lot of people will be hurt. Now, first about the tokens themselves. Those tokens being offered, many of them are offered and sold as securities. There's actually a lot of clarity on this front. You see, in the 1930s, Congress established the definition of a security, but they included like 20 different items. You'll be familiar with some of them: stock, bonds, notes. But one of the items is called an investment contract. In the following decade, the Supreme Court took off what's the definition of this term. Black letter law, investment contract. This case said an investment contract exists, and I'm going to quote for a moment: 'A person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party.' You might have heard of it, it's called the Howey Test, related to an estate of William Howey that actually was about orange groves in Florida. And what do orange groves in Florida have to do with cryptocurrency? Well, the Supreme Court has upheld this test a number of times subsequently. And so further, there are other tests, there are many other determinations of what comes under the federal securities law. Now, my predecessor, SEC Chairman Jay Clayton, I think said it well in 2018 in congressional testimony. He said: 'To the extent that digital assets like...' and I think he named Bitcoin, but he said: 'To the extent that digital assets like initial coin offerings or ICOs are securities...' and then he goes: 'I believe every ICO I have seen is a security. We have jurisdiction. Federal securities laws apply.' I find myself agreeing with my predecessor, Chair Clayton. You see, generally folks are buying these tokens in anticipation of profits. That's the core thing the Supreme Court said. And there's a small group of entrepreneurs and technologists standing up and nurturing the projects. Geez, anticipation of profits, small group of entrepreneurs standing up something. Our federal securities law says there's a need for some protection. And I believe we have a crypto market now where many tokens may be unregistered, without requiring the disclosures in the market oversight. This leaves prices open to manipulation, this leaves investors vulnerable. Now, over the years, the SEC has brought dozens of cases, many of them during my predecessor's time. I've only been here three months, and yet having brought dozens of cases, we haven't lost a case. Having done all that, there are thousands of projects out there, thousands of tokens and so forth. I mentioned earlier over 75 with a billion dollar market value or more. There are also initiatives by a number of platforms, and I'm going to mention three types of platforms: trading platforms, lending platforms, and then there's a third type of platform called decentralized finance, which sometimes is doing one of the first two things. And there are many crypto tokens within these platforms priced off of the value of securities and operating in this space. And so I would have to say that with regard to these three types of platforms, the world of crypto finance now has these venues. I believe these platforms not only can implicate securities laws, but some platforms also can implicate commodities laws and the banking laws. Now, just thinking about a platform right now, many of them have 50, maybe a hundred different cryptocurrencies, crypto tokens trading on them. And while each token's legal status depends on its own facts and circumstances, the probability is quite remote that with 50 plus tokens, none of them are securities. It just sort of belies the arithmetic that I've learned and how I learned to think about probabilities at MIT. You could have 50 or 100 tokens and none of them are securities. Moreover, unlike other trading markets where investors go through a broker or some other intermediary to access, let's say, the New York Stock Exchange or London Stock Exchange or even the Shanghai Stock Exchange, people can trade crypto trading directly. They can do it 24 hours a day, seven days a week, and from around the globe. And for those thinking about national security, this is very much a seven day a week, 24/7 market, with Asian retail participating, with U.S. retail, Latin America, African, European. It's a truly worldwide market. Further, while many overseas platforms state they don't allow U.S. investors into their platform, there are allegations that some unregulated foreign exchanges facilitate U.S. investors tapping in through virtual private networks. Paul, your paper just ran a story on this in the last week. The American public is buying, selling, and lending crypto on trading, lending, and these DeFi platforms, and there's significant gaps in the investor protection. Now, make no mistake: to the extent that there's securities on the platforms under our laws, the platforms have to register unless they meet some exemption. Make no mistake: if it's a lending platform, it's offering securities, it also falls within SEC jurisdiction. Next, let me talk about stable value coins, which are crypto tokens pegged or linked to the value of some public money, fiat money. Many of you may have heard about Facebook's efforts to stand up a stable coin called Diem, it was formerly called Libra. And now, due to the global reach of Facebook's platform, this has gotten a lot of attention, as you know, from central bankers and regulators around the globe. It's not only due to the general policies concerning crypto that I've mentioned about investor protection and guarding against illicit activity, but it's also due to Diem's potential impact on monetary policy, banking policy, financial stability in jurisdictions around the globe. But maybe less well known to this audience is that we already have stable value coins. In fact, the universe right now, the seven or eight major ones, a little over 110 billion dollars in value, including four large ones, some of which have been around for seven or so years now. You might say, 'Why is that? I hadn't heard of that.' Well, these stable coins are embedded in the trading and lending platforms and the DeFi platforms I just mentioned. You might say, 'Why is that?' Well, most of those platforms, the majority of what happens there is cryptocurrency to cryptocurrency. It's not U.S. dollar versus Bitcoin, but it's something called a stable value coin, maybe US Dollar Tether or USDC, which was started by a couple of companies here in the U.S. But it's a stable value coin versus Bitcoin. Hmm, wonder why that is. Now, in July, nearly three quarters of the trading in all crypto trading platforms occurred between a stable coin and some other crypto token. Thus, the use of stable coins has become just facilitating, embedded in the crypto ecosystem. And why might that be? Well, you see, these platforms may facilitate those seeking to sidestep a host of public policy goals: sidestepping our traditional banking system because you don't have to give them any bank account information, you're just going stablecoin versus Bitcoin or another crypto, potentially sidestepping anti-money laundering, tax compliance, sanctions, which ought to be of interest to this audience, and the like. So this all affects national security. Stable coins, well before any Facebook Diem, are right now in the center of this marketplace. Further, these stable coins may be securities and investment companies. To the extent they are, we at the SEC will apply full investor protection under what's called the Investment Company Act and other laws on these products. And I look forward to my colleagues from the President's Working Group, led by Secretary Yellen, doing a project or report in this area. Next, I just want to mention something about investment vehicles. Investors may want exposure to this asset class but not do it directly, do it through some collective investment vehicle. We do it in the equity market, we do it in the bond markets. People might want it here. Well, there are some vehicles that already exist. There's one that's been around for about eight years, it's over 20 billion dollars in size. Also, there are a number of mutual funds that are investing in what's called Bitcoin futures on the Chicago Mercantile Exchange, and that's overseeing the Bitcoin futures by our sibling agency, the Commodity Futures Trading Commission. I anticipate there will be filings with our agency with regard to exchange-traded funds. We have some already, but I anticipate we'll have some new ones under what's called the Investment Company Act. And when combined with other federal laws, the '40 Act provides significant investor protections. And given these important protections, I look forward to seeing what staff says about these filings coming forward related to these regulated Bitcoin futures trading on the Chicago Mercantile Exchange. Let me say we also have another little work stream at the SEC, but it's important. It's about custody of crypto assets. And the SEC put out to comment to the public to understand how best to ensure for custody protections, because this is an area where there's a lot of theft. Let me just say before I conclude, I'd like to note that we have taken and will continue to take our authorities as far as they can go. And certain rules related to crypto assets are well settled. For instance, the test to determine whether a crypto asset is a security is clear. Now, some in the industry would say it's not clear enough, but I would say I agree with Jay Clayton. It's clear in this regard. There are some gaps in the space, though. I do think we need additional congressional authorities to prevent transactions, products, and platforms falling between regulatory cracks. I also think we need more resources. We could double or triple the number of people we have working on this at the SEC and still probably not fully cover this field. We stand ready to work with Congress, the administration, our fellow regulators around the globe, and partner up. We stand ready to hear from the entrepreneurs and technologists in the field as to what's working and what's not. But in my view, the legislative priorities should be around these platforms: the trading, lending, decentralized finance. Regulators would benefit from additional authorities in this space. We can also attach things around sanctions and tax collection and tax compliance and anti-money laundering. So it's about all the policy suites right there. Right now, large parts of the field of crypto are sitting astride, not operating within regulatory frameworks that protect investors and consumers, guard against illicit activity, ensure for financial stability, and yes, protect national security. Sitting astride isn't a sustainable place to be. Technologies for generations have come along, they might sit astride public policy for a while. But for those who want to encourage innovations in any field, but if you're encouraging in crypto, I'd like to note that financial innovations throughout history don't long thrive outside our public policy frameworks. And I would also note to some that are thinking of investing in this space, private monies also often fail. And one could study a little bit of history. In the U.S., we had a lot of private monies during the wildcat banking era of the mid-19th century. But back to the heart of this: the heart of finance is trust. That's insurers for our national security here, our financial security, but also around the globe. And at the heart of the trust in our financial sector and in markets is investor protection. The field is going to continue or reach any of the potentials to be a catalyst for change that, whether it was Nakamoto's vision or any individual listener's vision, I think we better bring this into our public policy framework. So I thank you. I look forward to Paul's questions.

I'm doing well. It's good to see you again, by the way, Paul.

So, Paul, I think you raised a great question. Technology has come along in every generation, and I think my predecessors have addressed technological change in each generation. Arthur Levitt in the 1990s, who was the longest-serving SEC chair, really had to deal with the dawn of the internet and what that meant, and trading platforms that didn't quite look like exchanges, but they're a little different. By the way, it was pre the SEC, but there were debates in the 1920s whether to even allow a telephone on the floor of the New York Stock Exchange. Real debates, you can go back and look at. So I think what's happening now is, you're right, technology is rapidly advancing. The cost of communication has come down. You can, in the crypto area, you can trade without a broker directly on a crypto platform. But even in our regular equity and bond markets, I've asked staff: how do we move forward? The United States, I really do believe, has the most efficient, the broadest capital markets, our debt and equity markets. But we can't take that for granted. We can't take it as a national heritage. And I asked how can we update our equity market structure so that investors, regular working families, get a better deal and we drive more efficiency? Investors do well, companies do well. Maybe the folks in the middle get a little less economic rent, but the others do really well. I think in the treasury markets, we've had some hiccups over the years in 2014, 2019, and 2020. That's for another discussion, but the treasury market, a 20 or so trillion dollar market, it's really important to the U.S. that that market is as efficient and resilient as possible. The municipal bond market, the corporate bond market. So we have projects in every one of these, trying to drive to what I would say more efficiency, more transparency, and yes, competition, which will make it more resilient. But I couldn't agree with you more. Technology is a little faster, and the lowering cost of communications and, as you mentioned, the global reach of the markets. I mean, we even last week were talking about companies related to China issuing in the U.S., and that global reach is part of this technology story.

Well, it's a great question, but we have this in the treasury market, in the equity market as well. The treasury market is a global market. Our U.S. stocks are issued here, and we have to focus on the transparency and the protection against fraud and manipulation in our equity markets. Similarly, whether it's Bitcoin or other crypto assets, if U.S. investors are getting exposure or buying or selling these, then our remit is to ensure for investor protection. And if we do that well, I think that not only do investors benefit, but if this innovation has any chance of surviving into the late 2020s and 2030s, it can't stay astride the public policy. I mean, there are a lot of platforms that, again, probabilistically, are trading or lending securities on those platforms. Come in, register, work with the SEC. If we need to work with Congress to get the appropriate authorities and add to our authorities. But I think this idea that this market can just, because it's global, we shouldn't get involved, or just because it's newish, I mean, you know, it's been around for 12 years, we shouldn't get involved. We still have core public policy goals. And to this audience, I mean, the core public policy goals of national security. I mean, crypto assets are being used for ransomware, for dark web applications. And so how do we sort of, frankly, rein that in? This new form of potential private money does not have the three attributes of money, but for the use of ransomware, then it becomes a medium of exchange.

So these are great questions. And in fact, I was invited to speak today. One of the four invites came from Nick Burns, and I think Nick was part of that simulation, if I remember. Look, I would say this. We have had public monies again since antiquity, but we did something 30 to 40 some years ago where we layered over our public money system various national security imperatives: sanctions in Europe, the UN, the U.S., and the like. We also layered over various law enforcement initiatives. We could because it went digital. Well, I don't think we will or should back away from those public policies. Those are important to a couple hundred countries around the globe, it's not just the U.S. But now, Satoshi's innovation, while a catalyst for change when we think about payment systems and when we think about good faith actors making payment systems more efficient, it's also sort of challenging and it's being used to challenge those sanctions and law enforcement and guarding against illicit activity and tax compliance. And I think that's been a challenge in many nations. That simulation was about something different, though. That simulation was about something about nation-states saying, in this digital age, how do we provide our currency, our sovereign fiat currency, to the public? We used to do it with coinage and paper. It's actually linen in the U.S. with paper money. And providing that to the public now that we live in a digital age. Our digital money is commercial bank money, but nations around the globe are saying maybe to do something a little different. And I leave that to my colleagues at the Federal Reserve and Treasury and maybe in Congress to determine that. Our remit at the SEC is about investor protection in the markets. But you're right, there is this national debate going on about how that fiat money is potentially directly provided in a digital form to the public.

Here's the thing. Look, I am who I am. I truly believe the innovations of the 1930s helped economic growth in America. That what Franklin Delano Roosevelt and that Congress, a series of Congresses, put in place around our securities laws lifted economic growth because the American public could have a greater trust in the market, and companies, good faith companies trying to raise money, could raise that money. We had a basic bargain: investors can take risks, and investors fine, but disclose the material information to them and protect against fraud and manipulation. That's where we are, and that's where I am about Bitcoin and the crypto space. If somebody wants to invest, as they have in gold or silver, that's a speculative play. But to layer over that investor protection, I think that enhances economic activity but also protects investors. We wouldn't have the use of automobiles today if we didn't have some basic bargain. If we had no traffic lights, no stop signs, no cop on the beat, do you think Detroit or later other cities, great cities in the South that have a lot of the automobile factories now in America, would they be producing as many cars if we didn't feel safe on the roads? Or at least within some margin of error safe on the roads? So similarly, I deeply believe in markets, but I think as new technologies come along, we adjust, and we still have core public policy goals: investor protection, financial stability, guard against illicit activity, and yes, national security.

Yeah, my question is how effective can the SEC be, given staffing issues and given all your other responsibilities, and the crypto market's a 1.6 trillion market, capital markets are 100 trillion. I mean, how much attention can you really dedicate to the crypto market?

No, look, you're raising the right questions. It's a question. The authorities are largely there. I think working with Congress we can get some additional authorities, particularly with regard to these platforms. But it's also quite a resource intensive area. And unfortunately, entrepreneurs and technologists are standing up platforms, and maybe they're sitting in a jurisdiction in a small island nation. I mean, some of these are registered in the Seychelles. I'm sorry, I'm not trying to start any national security issue with the Seychelles, but you know, they're registered in Malta or the Seychelles or the Cayman Islands. And so they're trying to sort of say we don't take US investors, we don't take US persons, but then maybe as alleged it's coming through a VPN. And so these cases take some time to put together. So it's a resource issue. We have a lot of authorities, but yes, I think working with Congress we could get some additional ones around these platforms.

So it's a great set. I know you're combining different people's questions. It's a great set of questions. Let me say, I think there's actually a fair amount of clarity. And why did I quote Jay Clayton to say it crosses chairs, it crosses party lines, it crosses different philosophies? I mean, Jay and I really met as he was in this job and he was in his job and I was at MIT. I think there's a lot of clarity. The Howey Test and these other tests, Reeves test, there's something called Gary Indiana, Gary Plastic, not Gary Gensler. There's a number of tests that really is quite clear. What I'm trying to say about the platforms, and then I'll get to your point about regulation by litigation, I think was what Anja said. Actually, it's a question that I think came from John Burton and Julie Globus right there, John and Julie. But I think that the platforms, look, if you have three or five tokens, you know, I'm not going to judge any one token. It's facts and circumstances. I'm not going to judge anyone token on this open Webex. It's possible. But when you get to 25, 50, 100 tokens, probabilities are it's pretty unlikely that all 50, all 100 don't pass the Howey Test. And why is that? The Howey Test is a core three-part test. The Howey Test: did you give somebody money in anticipation of profits on their efforts? Now, usually there's a handful of people at the center of these XYZ project or ABC project. I'm not going to use names. There's usually a handful of entrepreneurs and technologists that in effect the investor is helping those people do well. So that means anticipation of profits on the efforts of others. I think it's kind of just like reasonably clear. I would say very clear. Now, in terms of the enforcement, yes, we're going to use our enforcement authorities as my predecessors did six or seven dozen times, and we'll continue to do that. What I'm also saying to those platforms: come in and discuss it with us, get registered, work with us, and work with Congress if there's things that might be appropriately shifted in our laws, additional authorities or adjustments. That's what new technologies come along. The internet came along in the 1990s and the SEC did do some adjustments under a great leader, Arthur Levitt, and Congress also weighs in from time to time. It shouldn't just be static, but I'm saying I think a lot of this is clearer than some of the entrepreneurs would like to think.

So I'm not... I just... yeah, good try. Good try. You try a third and fourth time, but I'm not going to go into any one token. Absolutely. Gary Gensler would tell me I shouldn't. He's a wonderful new head of enforcement, so it makes a lot of sense. I'll just disappoint the 100 plus people who've asked this question in different ways, but I wouldn't want to disappoint Gurbir absolutely.

No, it's a really... no, no, it's a really good question. And you're right, Nakamoto's innovation... back to the... by the way, I'm still waiting, Paul. You're going to tell me who Satoshi Nakamoto is, who she is, right? Now I'll tell you after. I'll tell you what. All right, all right, all right. But in all seriousness, if any of the thousand listeners actually know, we all would like to know who this is. It's a foundational story that we don't know who the foundation is. That person. But back to that, Nakamoto's innovation relies on computers solving a small computational puzzle, and that takes electricity. And the larger the network, the more electricity. And it takes a lot of electricity, as you say, in China and other countries. The proof of work... we are, I think, at a time in the 2020s that the SEC, right in our remit, is to update because investors want information about climate risk of their issuers. If I'm investing in a company, I want to know, and many investors want to know, about the climate risk, the physical risk, and the transition risk as countries and companies are committing to certain futures. Net zero is what people talk about, but other futures in that in greenhouse gas emissions. To your question, or to the questioner's questions, there is a really interesting intersection between climate risk disclosure, which hopefully the staff will propose to our commission. We haven't proposed it yet, so I don't want to get ahead of it, and we'll take public comment. But there is an interesting intersection. If we are successful and have climate risk disclosures for issuers, and if some issuer is buying cryptocurrencies or making up a lot of in that space, what is their carbon footprint, so to speak? What is their greenhouse gas emissions? And I hate to get a little technical, it relates to a part of what we will be seeking public comment on, is not only the greenhouse gas emissions of the issuer, but what's called Scope 3. What is the greenhouse gas emissions of their suppliers and their customers that they're affecting? And that's something we're going to, hopefully the staff will recommend to our commission, and we'll see what the public says. So a lot yet to be thought through, and we really do look forward to public comment on these intersections.

So I've only been in this job three months, but so it's been a lot of collaboration. I'm going to do your second question first. A lot of collaboration with other nations through the Financial Stability Board, through the usual forums, what's called IOSCO, and some bilaterals on a bunch of issues. I mean, what financial stability on money market funds, on climate risk, and yes, on something called the LIBOR transition. A lot of really good collaboration. In crypto, my observation that goes beyond my three months in the job but also my study of it at MIT, a lot of collaboration around again these financial forums around cryptocurrencies in terms of illicit activity, around stablecoins, and look at some big projects like this Facebook project. I'd say that in the investor protection space, it's been a little bit more jurisdictional focused than international folks. And I think that's one of the challenges. I think I've had really good conversations with other regulators, but I think this jurisdictional approach has some... basically, some of the platforms are trying to play arbitrage between jurisdictions, right? On your earlier question, and I can't help but thinking, how do you stay so young? Because the audience might not know that Bob actually, if I remember, was a young staffer in the State Department in the opening up of China. Am I not mistaken?

Oh my god, you were at the beginning of all that. At that point, there was no trade and no investment at all. So it shows you, you get to the point of how the world's changed. But that's why I'm raising that just for a moment to say a lot is changing. And so we layered as nation states over our digital money system. Remember, we went from paper to digital, and we layered over sanctions, anti-money laundering, tax compliance. So when Satoshi comes along in 2008, Halloween night, and writes this eight-page paper, nobody's noticing. I mean, there was the crisis, but it's not all that surprising. It started to be used as a private form of sort of arbitrage to avoid and skirt some of the public policy goals of sanctions, anti-money laundering, tax compliance. You're asking a different question about nation states and how they would feel, and I'm going to try to leave that to others in the administration. I do have some personal views, but it's not really in the remit of the SEC. But I share your view that there's competition amongst digital forms of money: Satoshi's private money and the public monies. But you're also highlighting there's some potential competition amongst public forms of money. I think for the US, we've got an incredible capital market. We have really deep respect for the rule of law. We have open financial markets. And so I think one of the jobs I have as chair is to ensure that whatever years God and President Biden give me in this job, that I ensure that the capital markets are stronger when I leave it than when I got it. And that's why I'm thinking about projects in the equity markets, the treasury markets, the corporate and municipal markets, that we really ensure that they stay the shiny object, the most efficient markets in the world. So I hope that helps. And that is the national security. I think the SEC is a domestic economic agency, but overseeing a hundred trillion dollar capital markets, it's a national story. I think it's one of our real secret sauces of the US.

Thank you very much, Bob.

I know you said so, Neil and Michael, with all respect, we've been awfully clear on a bunch of this stuff. So I'm pushing back a little bit with all respect. And is that I think that Jay Clayton was pretty clear four years ago, or no, three and a half years ago. I think 75 cases in this area, and you can go to the SEC website and see them, have been clear. I think the DAO report in 2017, the Munchie order late in 2017. I do think there's work that we're doing in custody. I doubt that's why Neil and Michael raise it. I do think there's work we're doing in custody that we can bring. I think that we're seeing some progression in the fund space. As I mentioned, we have some mutual funds, and I anticipate we'll have some filings, I'm being technical, under the 40 Act for ETFs and just investing in Bitcoin futures. But I think where we can use some additional work with Congress is on these platforms. We're going to do everything we can, and I do encourage those platforms to come in and talk to us, register. I mean, probabilities are you've got securities on your platforms. Maybe not, maybe not. And so I think we have these six or seven different work streams, so it sort of depends. But I think we've got a lot of clarity, and it's not just these 75 cases we've brought. It's just the law is the law. If you follow what the law is.

Thank you. Thank you so much, Paul, Nick, for inviting me. Bob for the exchange. Anja and all your questioners. Yes, absolutely. Very enthusiastic. Thank you very much. Thanks.