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We're going to bring in SEC Commissioner Hester Purse, who leads the regulator's crypto task for us. A lot of clarity that is awaited here, but let's talk first about what's already in standing. There have been a lot of enforcement at actions really bought forward by the previous Ganceler administration. Are any of those cases going to now be dropped?
Well, Schanali, it's great to be here, and you point out the enforcement cases that we were left with or do complicate the situation. We have been using enforcement cases to set regulatory policy. We're trying to shift that so we actually set policy and then we bring enforcement cases as needed. But we will have to untangle the cases that are that are there, and that will require some work, but also it's facts and circumstances. We have to look at each cases on its as we go forward.
As we mentioned earlier, the SEC fold request to put its case against Binance on hold. What other cases do you have to untangle?
Well, I think people know that we've brought a lot of cases over recent years against a number of people of entities in the crypto space, and we have to look at each one of those on its own facts, but there are a lot of cases out there, so that is one piece of the work that's going to require time and patience.
I also want to talk about the agencies themselves. If you think about the SEC and the CFTC as well, how soon do you think it's going to be worked out in terms of where ultimate authority over the crypto industry is going to be. Is there a case to be made that the SEC over the CFTC should kind of be the ultimate arbiter here or do you think it should be the other way around.
I think again, there are a lot of things going on here. One is that we're working on looking at archers diction that we currently have and saying what falls inside that jurisdiction, what falls outside that jurisdiction, And then we can point out to Congress where we think there are gaps where maybe something is not covered by our jurisdiction, not the CFTCS, not the FTCs, and then it's up to Congress to fill that in. Of course, Congress is
working in parallel. They're working on legislative efforts to provide more clarity, and so we're always willing to shift course, if they decide we should have more jurisdiction or less jurisdiction commission.
How do you feel about this idea that's been put forward largely by academics. Really at this point about a potential merging of the two agencies, do you think that there is some sensibility here for there to be one agency rather than two disparate ones and in a move really that would clear up some confusion, not just for the crypto industry but for financial enforcement at large.
That is definitely above my pay GRD. I've got a lot of issues I have to worry about, and that is not one I will take on. If Congress makes a decision, I'll work with whatever that is. We have worked well with the CFTC in the past on issues like derivatives policy, and I'm happy to work with them on crypto policy as well. In fact, we are trying to coordinate even now. Well.
As we've mentioned, you're the head of the SEC's crypto task for US. You're widely seen as an advocate for the industry. I have this really basic question, why are you such a proponent proponent of crypto? In your view? What purpose does it serve?
So I would take a little bit of issue with that question. I don't describe myself as an advocate of the industry. I'm a freedom maximalist though, and I think what the approach that we've been taking to crypto has been one of using regulation to stop people from trying to do interesting things they want to do. We actually
have a very flexible regulatory framework. Congress saw the need to give us exemptive authority, for example, we have the ability to use these things, and instead we've just put roadblock after roadblock up against people who are trying to come in and talk to us as we've asked them to do, or come in and register as we've asked them to do. And so all I'm asking is that we have an innovation policy that allows people to innovate and that allows people to try new things. And that's
really applies across the board. I think there are other areas where we need to be better on innovation too, But watching what's happened to Crypto over the past several years has just been extremely frustrating for someone who believes that government is there to serve the American people, not to stym me them when they're trying new things.
Does that mean that, in your view, crypto does have a purpose and what is that purpose?
Well, I think that there is a lot of really interesting work that is being done and that will be done involving crypto. I mean the technology allows people to coordinate in ways that was not possible before. People who don't know each other. And you know in the past that it's been very difficult for people to build something with other people across the world they don't know. But this creates a trust mechanism that really does enable people
to do interesting things. You can build things on a public blockchain, and you can you can build things in the financial world. We might see some integration of blockchain technology into the traditional financial world. You can do things outside of finance as well using the technology. So I think it remains to be seen where it will go, but I'm excited to see where it takes us.
You refer to yourself as a freedom maximalist. Does a freedom maximalist does that mean there should be no regulation in this space?
We look, we live in a country where we have a very established financial regulatory framework and other regulatory frameworks as well. The one I've worked in is the financial regulatory framework and I'm committed to using the existing statutory framework that we have. And as I've said in announcing this task force, it doesn't mean a free for all. It doesn't mean you get to do whatever you want. We have rules in place and those rules will be enforced.
But I think in this country, regulation is designed to create some basic parameters and then let people have the maximum freedom to innovate and try new things within that and frankly allowing people who desire to participate as investors or purchasers to have that freedom too, with the understanding that with that comes responsibility and that if something goes wrong,
you don't necessarily have someone to run to. But of course we have rules in place, and of course we will continue to enforce those rules.
Commissioner, I want to go back also to a letter that you wrote, a statement that you wrote a week ago, and the title of this is the Journey Begins. In that letter you talk about how the Commission is working hard to process applications for exemptive relief. Could you give us some clarity, some more color around what types of exemptive relief you are looking to grant companies right now.
Well, so there are a couple different strands that we're working on. There have been a lot of exchange traded product applications that have come in and so that's one thing that we're looking at. But we've also invited people in to get relief from particular provisions of the statutes and regulations where they're bumping up into problems because there's something unusual about the technology that doesn't fit with the legacy statutes and regulations. So we have this authority to use.
We can use it on a case by case basis, we can do it on a class basis if there's a set of people in the industry who need relief. So we're looking at all kinds of different adjustments that people need to be made, again maintaining our commitment to our repart mission, which does include investor protection.
The other part I'm wondering about is when it comes to exchanges, in particular for the path to registration, do you see a path prior to any legislation taking a fact, do you think that this process could be facilitated faster?
I think the first question that we have to ask is is this a trading platform that's trading something that is a security, in which case there would be a need to register with us, and we have exchanges and we have ATS's as well, which are a different form of trading venue, and so that's something that people can try to use in the crypto space. So we're willing to work with people on those kinds of applications as well.
Finally, you mentioned kind of the etss that have been looking to register. Of course there has been a lot of them tied to many different assets. How are you looking at these filings coming through and to the extent that there could be some restrictions, where would they be and what would they involve.
I think what we're trying to do is apply precedent the way that it it, you know, in a way that's consistent, so that we're trying to stay consistent with the past, yet looking to the new technology to see if there's anything about it that enables us to tailor craft or approach. So we're really looking at the whole gamut. We're getting a lot of these in and so we're trying to take a holistic look yet also looking at each one in its facts and circumstances, and we'll provide
guidance as we can do it. If there's sort of universal guidance we can provide. We'll do that, but it's still early stages.
Commissioner, does the President and First Lady launching their own mean coins make your job more difficult?
You know? I think one of the things we're trying to do is look at categories of tokens that are out there. There are lots of people who are introducing meme coins right now. Facts and circumstances matter. We always have to look at the facts and circumstances. But many of the meme coins that are out there probably do not have a home as in the SEC under our current set of regulations. And so again, if that's something that Congress wants wants to address, they can do that.
Maybe that's something the CFTC wants to address, But many of those I think probably are not within our jurisdiction. Now.
Finally, I want to ask you before we let you go here, we had referenced the sixty day pause of the SEC binance lawsuit. Do you see a pathway to drop the lawsuit entirely or is this something that the new SEC will still want to be pursuing.
Well, I can't talk about any specific case. I think we are looking at each case on its facts and circumstances, and bearing in mind this is a really unusual situation for us to be in. During the past several years, in florsement cases have been used as a way to
make regulatory policy. That is very atypical, and we're trying to get back to the path where we're really using our other tools to make policy and we're dealing with enforcement issues using our enforcement tools, and so that all needs to be worked out.
Commissioner, before we let you go, a question about deferred resignation offers. Can you tell us how many employees have taken the administration's deferred resignation offer and is there some sort of target for how many staff the agency could lay off.
So I don't know the answer to your question. As you know, the deferred resignation program has the timeline has been extended out on that due to court consideration of that program. What I will say is that we have a lot of really fantastic people working at the SEC. I've had the chance to work with them now for the past seven years, and they're doing really important work.
And.
I've want to continue working with such wonderful people, and so we'll of course be as I think everyone in the government is doing. Thinking about how we can do our jobs more efficiently and effectively. That's something that should always be on our minds. But we do have a wonderful workforce.
Is it overstaffed in your view?
I think one thing to remember is that the capital markets in the United States are not only very large, but they're very important, the most important in the world, and so there are always more things that you can do with your resources. We can always examine more firms, we can always look at more registration statements, we can
always bring more enforcement actions. It's a question of getting the balance right and thinking how can we best use the resources we have, the very talented people we have, do we need to redeploy them? Are they being used in the right way? And those are questions that any SEC leadership is always asking. How can we best use the resources we have? Where do we need to move people? Where do we need to keep people in place? Those are always questions we're asking.
Nicec Commissioner Hester Purse, thanks so much for joining us. Really appreciate you. Thanks taking the time today.