Yahoo Finance

I'm joined now by SEC Commissioner Hester Peirce, who has been charged with leading the new SEC's crypto task force. Commissioner Pierce, thank you so much for sitting down with me. It's great to have you back on Yahoo Finance.

John, it's great to be here. Thanks for having me.

Coinbase announced this morning that the SEC has dropped its lawsuit against the firm to register as an exchange with the commission. I understand there's supposed to be a vote next Thursday on this. Would you vote in favor for this and could we see this lawsuit dropped once and for all next week?

I'm sorry, but I can't speak about ongoing litigation.

Would you support a dropping such a lawsuit?

Unfortunately, I just can't speak about ongoing cases. Curious whether the commission is changing its stance on how it views digital tokens. Before many were viewed as securities, is the SEC changing its view to seeing many viewed as commodities now?

Well, I've always had a little bit of a different approach than some of my colleagues on how we think about these things, and so what I'm hoping that we can get to is a place where we have greater clarity around what how we're thinking about things, thinking about things in a in a legal framework that is workable, um that is consistent with the statute, um but also enables people to figure out what they what something is categorized as without hiring lots of lawyers and and and you know, having the fear of litigation hanging over them.

To your point, uh under the last administration, we saw that the SEC declined to write customized rules to govern crypto. Many security many tokens were seen as securities, and thus companies were told to abide by the rules on the books. Could we see the SEC write customized rules to govern crypto this year? And could we see clear definitions for what constitutes a security or not?

Well, I think we will work on trying to provide more clarity, and there's several ways we can do that. We can use guidance to help people understand where things fit, whether that's staff level or commission level guidance, and we can also write rules, which for all of these things will be trying to interact with people and find out where they need clarity and get people's suggestions about how to move forward. Some of the work is going to be done here at the commission. Some of the work will probably be done in Congress as well. Um so timelines are a bit hard, but um we are definitely working working and trying to work quickly to to get people some clarity early on.

Do you think we'll see something this year?

Again, whether or not a rule gets done this year, I don't know, and and I should say that I'm speaking only for myself. We're getting a new we we have a new chairman likely coming in relatively soon, and he'll have ideas about where the agenda should go and what should be on the agenda, but I think rule making could be part of what we do.

I want to go back to your statement on February 4th, where you said you're thinking about recommending action to temporarily offer relief for digital coin offerings to be deemed non-securities for the time being, again, temporarily. So long as they filed with the SEC certain information and kept that information updated, and that could actually be retroactive, you said in your statement. Are you planning to move forward with that? Is the SEC planning to move forward with that?

Well, it's something we're considering and something I've been thinking about now for a while, which is, can we give people at least the ability to try to launch a project, get network effects, get people using a token, um because that's really the point of a lot of this is to try to get decentralization and lots of participation, and that can sometimes run into the securities laws as we've applied them. And so thinking about how we can can get projects a road forward and one that involves disclosure so that people who are buying the tokens have some sense of what they're buying. I think that could be a real positive to do that early on, even if it's just a temporary fix while Congress is working and while we're working on rule making. Um so we're we're very interested in what people have to say about this, but this is one of the things that we're looking at.

Is it under serious consideration?

It's under serious consideration by me. Certainly, yes. I also want to ask you about under the last administration, a lot of crypto companies, including Coinbase, had real difficulty registering with the commission. Uh do you anticipate any changes associated with that process?

Well, I do think that we need to do more than just tell people they can come in and register, and then when they get here, um shut the door, which has been sort of the past practice. So I'm hoping we can have a practice where people can come in and talk to us and and we can think about when registration is necessary, and if it is necessary, are there accommodations that we need to make using the tools that Congress has given us to make accommodations? Again, our securities laws we have objectives that we have to meet as a securities regulator, and we're not going to throw those out. That's that's not our plan, but we do think that we can both achieve our objectives of protecting investors and and and protecting the market's integrity and also achieve the objective of of allowing people to do things in this space.

Under the last administration, spot Bitcoin and Ether ETFs were approved, but they were not given in-kind redemptions. Could we see that change? And what about the potential for green lighting options for Ether ETFs?

So, in terms of um staking, that is something that people raised with us early on after after these products went through, and it's something that I'm open to. I think I'm happy to talk with people about that, um adding that I know that that's something that exists in in products and other jurisdictions. Um, in terms of options on on ETF ETPs, that's something we're open to as well. We're getting lots and lots of incoming exchange-traded product applications, um and and we'll be considering them on their individual facts and circumstances and processing them, just sort of as we routinely process these things.

The president this week signed a new executive order stating that independent agencies should submit major regulations to the Office of Management and Budget for review. How will that impact the SEC's rule makings, not just for crypto, but in general?

Probably, yeah. I mean, I've been a believer in the importance of economic analysis, and that means asking the question, what problem are we trying to solve, what tools are available for us to solve that, how can we pick the best tool? And OMB, and specifically, their ORA office can be really helpful in in helping us think through how to do that, because they're experts in this. So I'm certainly looking forward to working with them on on helping us make sure that our economic analysis is really serving the fullest potential that it can serve.

I understand based on Doge's website, it looks like Doge has been inside the SEC. Can you confirm that, and what do you expect from Elon Musk and his team in terms of cuts and the impact potentially on surveilling capital markets?

Well, I can't confirm that, and and I think one of the interesting ways that the SEC is set up is we have a commission, there are five of us, now there are three of us, but there if we're fully staffed, there are five. But the chairman does have authority over the budget, the staff, and the agenda. And so, um I think those contacts would be with the chairman's office. In terms of of, you know, thinking about how we can run the agency efficiently, that's something that we're always thinking about. It is very important. We feel, you know, that we have a real responsibility. We have excellent staff here, and we want to make sure that they're working on the most important projects that they can work on. And so, thinking about how to do that best is is something that is always front of mind for us.

Your colleague and acting chair, Mark Ueda, ordered SEC lawyers to delay oral arguments over a rule that would require companies to disclose the impact of climate change on their business. Uh is that a signal that the SEC is going to be rolling back that rule? And what other reversals could we see from the last administration?

I think the commission hasn't made decisions on that, but you know, I have had concerns about that rule making, certainly, and I expressed them pretty vociferously at the time that we we proposed and adopted those changes. I'm sure we'll be thinking about these kinds of things. Um and you know, in terms of what we're going to do on other rule makings, again, that's the agenda is is very much a work in progress. Um it's something that we're we're thinking about, what should be on the agenda, what should be off the agenda, there are rules that have been proposed but not finalized, we have to think about how and whether to move forward with those. So there's just a lot of work to do, and it's hard to to know where all of that will fall out. I will say that I think capital formation is something that will come back onto the agenda in a way that um will be really positive. It's been off the agenda, and I think we'll we'll be spending some some of our resources on on trying to improve capital formation.

I'm curious, the US President Donald Trump is participating financially in the same industry that the SEC is being asked to oversee. Um his media company is set to launch the Bitcoin ETF, I'm presume a vehicle that would need to be approved by the SEC. Does this create any challenges for SEC oversight, as you're looking to also work with the White House and the White House overseeing some of what you do?

I think what we do is we look at every incoming application on its facts and circumstances, and we take into account, you know, the unique facts and circumstances associated with each, and we'll do that with respect to anything that comes through the door.

Commissioner Peirce, thank you so much for your insights. So appreciate it. Hope to speak with you again soon.

Thanks for having me.