WEBVTT - SEC Commissioner Mark Uyeda Talks Crypto

0:00:02.520 --> 0:00:08.959
<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. We welcome our TV

0:00:09.039 --> 0:00:13.040
<v Speaker 1>and radio audiences worldwide. The US government has begun distributing

0:00:13.119 --> 0:00:18.120
<v Speaker 1>economic data on public blockchains, marking the latest Trump administration

0:00:18.200 --> 0:00:21.360
<v Speaker 1>endorsement of the crypto industry. The move creates another avenue

0:00:21.360 --> 0:00:24.360
<v Speaker 1>for publishing the GDP data. According to the Commerce Department officials,

0:00:24.480 --> 0:00:27.120
<v Speaker 1>we're here to discuss really the regulatory changes affecting the

0:00:27.120 --> 0:00:30.280
<v Speaker 1>crypto industry after the crackdown of the Biden years. Is

0:00:30.400 --> 0:00:34.440
<v Speaker 1>SEC Commissioner Mark Yuada. We welcome you to radio and TV.

0:00:34.640 --> 0:00:37.880
<v Speaker 1>And just recently Project Crypto was launched, and this really

0:00:37.920 --> 0:00:41.839
<v Speaker 1>sort of endorses the initiative to modernize regulation to make

0:00:41.880 --> 0:00:45.400
<v Speaker 1>it fit for purpose for current innovations within decentralized finance.

0:00:46.280 --> 0:00:48.720
<v Speaker 1>Are we getting enough clarity? How quickly might we know

0:00:48.800 --> 0:00:50.680
<v Speaker 1>what tokens of securities? For example?

0:00:51.120 --> 0:00:52.720
<v Speaker 2>We have a lot of ground to catch up.

0:00:53.159 --> 0:00:55.600
<v Speaker 3>The last four years in the Biden administration, we saw

0:00:55.800 --> 0:00:57.760
<v Speaker 3>a lot of efforts to suppress crypto, at.

0:00:57.680 --> 0:00:58.720
<v Speaker 2>Least in the United States.

0:00:59.080 --> 0:01:01.800
<v Speaker 3>That was one of the things that President did, I

0:01:01.800 --> 0:01:04.200
<v Speaker 3>think was the third David As administration Chaerman twenty third win.

0:01:04.240 --> 0:01:06.600
<v Speaker 3>He issued that executive order with a clear goal. We

0:01:06.640 --> 0:01:09.039
<v Speaker 3>need to make the United States one of the global

0:01:09.120 --> 0:01:12.480
<v Speaker 3>leaders in innovation in crypto and digital assets. That was why,

0:01:12.800 --> 0:01:15.440
<v Speaker 3>you know, one of the things I did immediately upon

0:01:15.800 --> 0:01:18.560
<v Speaker 3>becoming the acting chairman was to name one of my

0:01:18.560 --> 0:01:21.840
<v Speaker 3>fellow commissioners, Hester Perce, who spent an awful lot of time.

0:01:21.680 --> 0:01:23.200
<v Speaker 2>Talking to the crypto community.

0:01:23.720 --> 0:01:26.360
<v Speaker 3>You're going to be in charge of our efforts, leader

0:01:26.400 --> 0:01:29.119
<v Speaker 3>of our Crypto Task Force, and that now under our

0:01:29.200 --> 0:01:33.679
<v Speaker 3>new chairman Paul Atkins, has now pivoted into what we

0:01:33.720 --> 0:01:36.680
<v Speaker 3>call Project Crypto. We are working side by side with

0:01:36.720 --> 0:01:40.480
<v Speaker 3>our colleagues at the CFTC. They announced what they call Cryptosprint,

0:01:41.160 --> 0:01:43.959
<v Speaker 3>So we're really anxious to get some things done.

0:01:44.440 --> 0:01:48.000
<v Speaker 1>In terms of getting things done, there is a sort

0:01:48.040 --> 0:01:51.200
<v Speaker 1>of favorite pitch of innovation going on, and a lot

0:01:51.200 --> 0:01:53.840
<v Speaker 1>of that is to do with perhaps adoption of new

0:01:53.840 --> 0:01:58.560
<v Speaker 1>ETFs around things I'm interested in for companies tricycle, treasury companies,

0:01:58.600 --> 0:02:01.760
<v Speaker 1>companies that are building up crypto their assets, or indeed

0:02:01.920 --> 0:02:04.360
<v Speaker 1>new etf springing up. Are you comfortable with the pace

0:02:04.400 --> 0:02:07.720
<v Speaker 1>of innovation as it is? Are we going far as

0:02:07.840 --> 0:02:10.520
<v Speaker 1>fast or too fast from your perspective, Well, they.

0:02:10.400 --> 0:02:14.160
<v Speaker 3>Are part of the innovation equation, so to speak. But

0:02:14.240 --> 0:02:16.160
<v Speaker 3>they're just only a part of it. We've got a

0:02:16.160 --> 0:02:19.280
<v Speaker 3>lot more to do, you know, with these companies. The

0:02:19.400 --> 0:02:23.079
<v Speaker 3>SEC and it's ninety years of existence, has always been

0:02:23.120 --> 0:02:27.400
<v Speaker 3>a disclosure oriented regulator. That means we don't we're not

0:02:27.400 --> 0:02:29.440
<v Speaker 3>supposed to put our thumb on the scale of whether

0:02:29.440 --> 0:02:32.000
<v Speaker 3>an investment is good or bad. What our concern is

0:02:32.000 --> 0:02:34.440
<v Speaker 3>is whether or not you're telling the truth when you

0:02:35.080 --> 0:02:38.239
<v Speaker 3>market and provide the disclosures with respect to these products.

0:02:38.840 --> 0:02:43.080
<v Speaker 3>So they can put crypto in their treasury. They need

0:02:43.120 --> 0:02:45.160
<v Speaker 3>to disclose that, they need disclose the risks about that,

0:02:45.160 --> 0:02:48.000
<v Speaker 3>they need disclose what their intense intentions are is in

0:02:48.040 --> 0:02:50.600
<v Speaker 3>accordance with our rules and regulations.

0:02:51.040 --> 0:02:54.120
<v Speaker 2>But there's so much more that we need to do. Well.

0:02:54.400 --> 0:02:58.280
<v Speaker 1>Important for those companies that are looking to be treasury companies,

0:02:58.360 --> 0:03:00.760
<v Speaker 1>or those that want to put Salant for example, or

0:03:00.919 --> 0:03:05.120
<v Speaker 1>XRP or even dogecoin in an ETF, how soon will

0:03:05.160 --> 0:03:08.480
<v Speaker 1>they know whether those tokens are indeed deemed securities or not.

0:03:09.080 --> 0:03:12.760
<v Speaker 3>Well, we've already put out eight number of statements from

0:03:12.760 --> 0:03:15.799
<v Speaker 3>our staff in the Division Corporation Finance which says some

0:03:15.919 --> 0:03:19.520
<v Speaker 3>things are not securities. Now we are working on as chairman,

0:03:19.600 --> 0:03:23.160
<v Speaker 3>Akins said as part of his project Crypto Kickoff to

0:03:23.160 --> 0:03:25.920
<v Speaker 3>provide some commission level guidance. What is and is not

0:03:26.080 --> 0:03:29.040
<v Speaker 3>a security when it comes to crypto. It is tied

0:03:29.120 --> 0:03:33.360
<v Speaker 3>up in a decade's old Supreme Court decision called Howie

0:03:34.040 --> 0:03:36.720
<v Speaker 3>sec versus Howie as So whether or not it's us

0:03:36.760 --> 0:03:40.800
<v Speaker 3>an investment contract, the good news is that it is.

0:03:41.080 --> 0:03:43.920
<v Speaker 2>What I do as a principles based test.

0:03:44.080 --> 0:03:46.520
<v Speaker 3>Is it an investment of money in a common enterprise

0:03:46.600 --> 0:03:49.520
<v Speaker 3>with the expectation of profits from the efforts of others.

0:03:49.800 --> 0:03:51.800
<v Speaker 3>How do you apply that in the crypto space. That's

0:03:51.800 --> 0:03:55.040
<v Speaker 3>what we're looking to do in the next month. Can't

0:03:55.040 --> 0:03:58.040
<v Speaker 3>talk about timing, but what I can say is this

0:03:58.120 --> 0:04:01.360
<v Speaker 3>has been part of the Crypto Asks Forces efforts from

0:04:01.480 --> 0:04:04.400
<v Speaker 3>day one this year. Is you know, we took a

0:04:04.440 --> 0:04:07.760
<v Speaker 3>position which I objected to. I put out many descents

0:04:08.040 --> 0:04:11.840
<v Speaker 3>objecting to it, with this idea that every crypto with

0:04:11.960 --> 0:04:15.440
<v Speaker 3>exception of Bitcoin, which is what our former chairman Gary

0:04:15.480 --> 0:04:19.400
<v Speaker 3>Gensler testified before Congress, was a security. No, we have

0:04:19.520 --> 0:04:22.719
<v Speaker 3>this whole framework, we weren't applying it properly. We said

0:04:22.760 --> 0:04:24.800
<v Speaker 3>we're going to do this. That was what the crypto

0:04:24.800 --> 0:04:27.400
<v Speaker 3>tasks we started doing. That's why they held this series

0:04:27.960 --> 0:04:30.640
<v Speaker 3>of roundtables. In fact, that was the very first roundtable

0:04:31.000 --> 0:04:34.640
<v Speaker 3>was talking about what ought to be in and outside the.

0:04:34.560 --> 0:04:35.080
<v Speaker 2>Scope of this.

0:04:36.000 --> 0:04:39.280
<v Speaker 1>We're speaking of Marcubator, Commissioner for the United States Securities

0:04:39.279 --> 0:04:43.159
<v Speaker 1>and Exchange Commission. I'm interested. Previously it was sort of

0:04:43.320 --> 0:04:45.360
<v Speaker 1>regulation by enforcement, and you said you don't want to

0:04:45.360 --> 0:04:47.200
<v Speaker 1>put your funb on the scale in this way. But

0:04:47.279 --> 0:04:51.000
<v Speaker 1>how many crypto enforcements are ongoing at the moment? Can

0:04:51.040 --> 0:04:53.400
<v Speaker 1>you tell us in terms of the amount of investigation

0:04:53.480 --> 0:04:55.880
<v Speaker 1>still going. I know that for example, you unicoin is

0:04:56.240 --> 0:04:58.320
<v Speaker 1>being sued for example, and that happened in May.

0:04:59.320 --> 0:05:03.440
<v Speaker 3>We have a number of ongoing investigations and actions related

0:05:03.600 --> 0:05:05.440
<v Speaker 3>that would say our cryptoc crypto related.

0:05:05.560 --> 0:05:06.960
<v Speaker 2>We have an awful lot of what one.

0:05:06.839 --> 0:05:09.400
<v Speaker 3>Might call fake crypto, which is somebody who purports to

0:05:09.800 --> 0:05:12.279
<v Speaker 3>be involved in crypto, but it is nothing more than

0:05:13.520 --> 0:05:15.640
<v Speaker 3>the types of Ponzi schemes and other scams that we

0:05:15.680 --> 0:05:20.000
<v Speaker 3>have seen since probably the creation of currency.

0:05:20.480 --> 0:05:23.440
<v Speaker 1>How many staffers are looking at forcement now compared to

0:05:23.760 --> 0:05:24.719
<v Speaker 1>the prior four years.

0:05:25.000 --> 0:05:27.479
<v Speaker 3>Well, what we've done is we still have a unit,

0:05:27.520 --> 0:05:33.240
<v Speaker 3>although we've changed it from the cyber in Crypto unit

0:05:33.360 --> 0:05:35.520
<v Speaker 3>to be more broadly focused on technology.

0:05:36.520 --> 0:05:39.159
<v Speaker 2>We have an enormous number of tips.

0:05:38.839 --> 0:05:41.640
<v Speaker 3>Complaints, and referrals that come into the agency every year.

0:05:41.680 --> 0:05:43.520
<v Speaker 3>In fact, I think we're on track from nearly forty

0:05:43.560 --> 0:05:46.839
<v Speaker 3>five thousand. A number of them relate to crypto. So

0:05:46.920 --> 0:05:48.920
<v Speaker 3>we deploy it staff appropriately.

0:05:49.240 --> 0:05:51.920
<v Speaker 1>And you said you're working in lockstep almost with the CFTC.

0:05:52.040 --> 0:05:53.719
<v Speaker 1>How is that relationship going at the moment.

0:05:53.880 --> 0:05:56.320
<v Speaker 3>We've got a great relationship and it's one of the

0:05:56.320 --> 0:05:59.480
<v Speaker 3>things that was very important on the financial regulatory front,

0:05:59.520 --> 0:06:01.560
<v Speaker 3>not only between US and the CFTC, but US with

0:06:01.600 --> 0:06:05.080
<v Speaker 3>Treasury and the banking regulators about how to address crypto.

0:06:05.240 --> 0:06:08.960
<v Speaker 3>You saw this with the President's Working Group on Digital Assets.

0:06:10.120 --> 0:06:13.359
<v Speaker 3>They issue the report last month. This has been something

0:06:13.360 --> 0:06:16.960
<v Speaker 3>that has been I think really all of the relevant

0:06:18.040 --> 0:06:22.280
<v Speaker 3>regulators in the executive brand char all communicating with each

0:06:22.320 --> 0:06:24.560
<v Speaker 3>other and all coordinating with each other to make sure

0:06:24.560 --> 0:06:26.000
<v Speaker 3>that we can make this effort successful.

0:06:26.320 --> 0:06:29.120
<v Speaker 1>Now the SEC does more than just look at crypto,

0:06:29.279 --> 0:06:32.359
<v Speaker 1>and I'm interested in At the moment, you're currently suing

0:06:32.440 --> 0:06:34.760
<v Speaker 1>En on Musk and that's to do with alleged violation

0:06:34.839 --> 0:06:37.600
<v Speaker 1>of securities law. About when he was taking a significant

0:06:37.680 --> 0:06:39.880
<v Speaker 1>chunk in Twitter, he had owned about five percent in

0:06:40.000 --> 0:06:43.080
<v Speaker 1>excess of and he was meant to make that declaration.

0:06:43.680 --> 0:06:46.640
<v Speaker 1>Many would say he didn't do it quickly enough. He

0:06:46.680 --> 0:06:49.159
<v Speaker 1>wants that suit dropped. Should it be dropped?

0:06:49.600 --> 0:06:52.640
<v Speaker 3>Well, I'm not going to comment on a particular investigation

0:06:53.000 --> 0:06:55.839
<v Speaker 3>or enforcement action that we currently have, but what I

0:06:55.839 --> 0:06:58.120
<v Speaker 3>will say is, you know we have these scheduled thirteen

0:06:58.200 --> 0:07:03.160
<v Speaker 3>D and thirteen G requirements out there. One of the

0:07:03.240 --> 0:07:05.120
<v Speaker 3>key parts about whether or not you can file on

0:07:05.160 --> 0:07:07.320
<v Speaker 3>a thirteen G is whether or not you are a

0:07:07.360 --> 0:07:09.960
<v Speaker 3>passive investor. And one of the things that we did

0:07:10.000 --> 0:07:13.000
<v Speaker 3>take action is and there are a large number of

0:07:13.240 --> 0:07:18.880
<v Speaker 3>very influential asset managers that hold significant chunks well above

0:07:18.920 --> 0:07:22.760
<v Speaker 3>five percent of a company stock. Question is what sort

0:07:22.760 --> 0:07:26.080
<v Speaker 3>of relationship should they be having that requires additional disclosure

0:07:26.120 --> 0:07:29.080
<v Speaker 3>if they're asking or directing the company and says you

0:07:29.160 --> 0:07:31.880
<v Speaker 3>need to do the following things. For instance, on climate change,

0:07:31.880 --> 0:07:33.640
<v Speaker 3>you need to hit net zero goals. You need to

0:07:33.640 --> 0:07:36.640
<v Speaker 3>have a plan of how you get to net zero.

0:07:36.920 --> 0:07:40.520
<v Speaker 3>You're no longer a passive investor that requires additional disclosures

0:07:41.200 --> 0:07:45.080
<v Speaker 3>of some form because we have concerns whenever they're or

0:07:45.120 --> 0:07:48.080
<v Speaker 3>at least just say, Congress pass laws telling that we

0:07:48.200 --> 0:07:52.239
<v Speaker 3>have really large shareholders more than five percent, which perhaps

0:07:52.280 --> 0:07:54.320
<v Speaker 3>doesn't sound a lot, but in the real world that

0:07:54.440 --> 0:07:56.560
<v Speaker 3>is quite a bit for a company that they need

0:07:56.600 --> 0:07:59.360
<v Speaker 3>to provide the appropriate levels of transparencies of their discussions

0:07:59.360 --> 0:07:59.840
<v Speaker 3>with company.

0:08:00.920 --> 0:08:03.400
<v Speaker 1>We'll plenty more on your agenda other than just the

0:08:03.520 --> 0:08:05.920
<v Speaker 1>long case and indeed just crypto. It's been wonderful having

0:08:05.920 --> 0:08:07.280
<v Speaker 1>some time with you. Let you get back to the

0:08:07.360 --> 0:08:10.080
<v Speaker 1>day job. Mark Vada, of course, Commissioner for the United

0:08:10.160 --> 0:08:12.920
<v Speaker 1>States Securities and Exchange Commission. The SEC