Commissioner Hester Peirce: A Regulator’s View of Crypto Making Markets

This is Eric Golden and my guest today is SEC Commissioner Hester Peirce. Commissioner Peirce was sworn into the SEC in 2018. During her tenure, she has been a vocal advocate of free markets and a supporter of the crypto industry, to the point where she is often referred to as “Crypto Mom”. Regulation is a huge issue for our industry and I hope you’ll walk away from this discussion with a better appreciation for the nuance around protecting investors while letting innovation flourish. Please enjoy my conversation with Commissioner Hester Peirce.
 
For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.
 
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Show Notes[00:02:15] - [First question] - The role of a regulator and the relationship between a regulator and the sector or product they oversee
[00:04:29] - Her thoughts on how regulators are more like lifeguards than parents
[00:05:36] - Striking a balance that allows innovation to thrive instead of suppressing it
[00:07:17] - Overview of the 3 pronged approach of the SEC’s crypto mission
[00:10:15] - Being painted as an entirely fraudulent industry full of bad actors
[00:11:18] - What it’s like working inside of the seeming blackbox that is the SEC
[00:13:33] - How many of the 4,500 employees are dedicated to crypto and finances
[00:14:19] - Internal debates and public meetings amongst the commissioners  
[00:16:18] - Ways the commissioners learn about crypto being unable to participate in it
[00:17:36] - Whether or not there are restrictions on crypto ownership for the rest of the SEC
[00:20:38] - Managing the entrepreneurial spirit as we navigate the legalities of crypto
[00:23:16] - How revolutionary it would be if TradFi transactions were on a public blockchain 
[00:26:29] - Risky corporate assets and how blockchains could have averted the 2008 crisis
[00:28:47] - Difficulties of being a regulator and respecting the responsibility 
[00:29:56] - Self-reporting and the crypto community reporting suspicious activity
[00:32:12] - A skin-in-the-game investment that promotes self-education
[00:34:24] - Where the Safe Harbor stands and what it’ll take for it to move forward
[00:35:37] - The Howey Test and realizing we need new securities laws
[00:37:59] - Going from a security to a non-security and instruments that allow a transition
[00:39:25] - Leading a commission and if there’s a risk of losing a case
[00:43:18] - Alternative Trading Systems and Communications Protocol Systems
[00:45:03] - When the market could expect a spot Bitcoin ETF
[00:46:50] - NFT financialization and how they might need to be regulated
[00:48:12] - Her thoughts on DAOs and they’re rapid evolution
[00:50:29] - The underbanked using crypto and whether or not it impacts the SEC’s agenda
[00:51:54] - Emergence of stablecoins and her thoughts on their development
[00:53:37] - What role if any might self-regulating organizations play in the future
[00:56:35] - What she’s excited to see achieved over the rest of her term and what are some exciting dates or events she’s watching in the crypto space
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