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Speaker 1: Joining us now on both Bloomberg Television and radio is

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Speaker 1: SEC Commissioner Hester Purse. Commissioner Purse. How are you feeling

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Speaker 1: this evening?

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Speaker 2: Well, Kaylee, I'm delighted that we're at the end of

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Speaker 2: this saga. I know there's still there's there's still pieces

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Speaker 2: of it to go, but I think this is a

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Speaker 2: big milestone.

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Speaker 1: Well it's a milestone certainly for these these bitcoin products,

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Speaker 1: but it also raises a question of what sort of

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Speaker 1: precedent this sets. If you look at the statement from

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Speaker 1: the Chairman, Gary Ginsler, he was very specific that this

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Speaker 1: is specific to these bitcoin products, which are non security commodities,

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Speaker 1: and there's a question of what this could mean in

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Speaker 1: the future for essentially everything else. Is that door completely closed.

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Speaker 2: The chair is right to point out that this is

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Speaker 2: specific to a particular set of products, but obviously precedent matters,

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Speaker 2: and so you look at the reasoning and people will

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Speaker 2: do this. They'll look at the reasoning and the in

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Speaker 2: the order, and they'll seek to apply it to other

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Speaker 2: facts and circumstances as appropriate. So I think the only

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Speaker 2: thing I will say is that one of my complaints

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Speaker 2: in this area has been that we haven't always stuck

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Speaker 2: with precedent when it comes to these kinds of exchange

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Speaker 2: traded products. We haven't necessarily applied the same standards that

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Speaker 2: we do with respect to to other kinds of exchange

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Speaker 2: traded products, but it is a precedent people will point to.

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Speaker 3: That's the question. Of course, we're all asking whether it

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Speaker 3: opens the door for other ETFs backed by other cryptocurrencies. Commissioner,

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Speaker 3: is that in our near future?

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Speaker 2: Again, you know, every application has to be considered on

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Speaker 2: its facts and circumstances. But I one of the things

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Speaker 2: that I think that we have to acknowledge is that

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Speaker 2: when we when we apply a particular rationale to one

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Speaker 2: particular product, people will ask us to apply it to

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Speaker 2: other products as well well.

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Speaker 1: And they're also the question, Commissioner, of just the use

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Speaker 1: of these products once they do begin trading is expected tomorrow.

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Speaker 1: What kind of fiduciary responsibilities are there for investment advisors

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Speaker 1: for their clients before allowing them to put money into

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Speaker 1: these products.

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Speaker 2: It's like anything else, the fiduciary is supposed to look

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Speaker 2: out for the interests of the investors that she's working with,

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Speaker 2: and that means taking into account the specific circumstances of

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Speaker 2: that investor, the risk tolerance, the other elements of that

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Speaker 2: investor's portfolio, and so it's not a cookie cutter answer

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Speaker 2: one where or the other fiduciaries are paid to make

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Speaker 2: good decisions that are appropriate for that particular investor.

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Speaker 3: There were a few moments yesterday when we thought this

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Speaker 3: had been approved a day earlier, Commissioner, as you well know,

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Speaker 3: everything worked out with the Twitter account at the SEC.

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Speaker 2: Well it is, I mean, as there was a statement

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Speaker 2: I think that came out saying that we are going

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Speaker 2: to be looking into this and working with law enforcement

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Speaker 2: authorities to figure out how this happened, how yesterday's event happened,

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Speaker 2: and I hope that we get to the bottom of it,

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Speaker 2: and I hope that we're as transparent when we explain

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Speaker 2: what happened as we expect the companies that we regulate

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Speaker 2: to be when they experience a similar event.

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Speaker 1: Well, that certainly has gotten the attention of many on

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Speaker 1: Capitol Hill. Commissioner, there have been many congressional Republicans who

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Speaker 1: have made their opinions known about the SEC under this

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Speaker 1: chair for some time now, who have called a lot

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Speaker 1: of attention to yesterday's events. I'd also point to a

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Speaker 1: statement that we got out from that House Financial Services

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Speaker 1: Committee after this, they maintained that will legislatition to provide

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Speaker 1: clarity and certainty for digital assets remain necessary. The steps

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Speaker 1: taken today are a significant improvement over what they call

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Speaker 1: the SEC's track record of regulation by enforcement. That legislation

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Speaker 1: exists even with these approvals. Aside, should we expect that

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Speaker 1: regulation by enforcement to continue?

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Speaker 2: Well, I haven't seen much progress on us as a

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Speaker 2: regulator setting out clear rules of the road when it

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Speaker 2: comes to crypto products and services, and I think that

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Speaker 2: that's been a complaint that I've had, It's been a

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Speaker 2: complaint that others have had. We could, just as we

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Speaker 2: changed our tune here, we could change our tune on that,

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Speaker 2: and so I remain hopeful that we will. That said,

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Speaker 2: Congress has expressed an interest in legislating in this area,

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Speaker 2: and I look forward to seeing their work in this area.

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Speaker 2: And they have a clear interest in figuring out which

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Speaker 2: regulatory which regulator should have authority in this area, and

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Speaker 2: I look forward to seeing what comes.

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Speaker 1: Of that, as do we commissioner. As do we Obviously,

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Speaker 1: while while we're waiting for that, a lot will just

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Speaker 1: depend on the actions of the securities and danged commission.

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Speaker 1: In an addition to a lot of these enforcement actions,

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Speaker 1: if you will, there are also just questions around fraud

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Speaker 1: and manipulation. The argument initially about what Chairgenstler was so

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Speaker 1: concerned with about these products in the first place, spot

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Speaker 1: products specifically compared to futures. Obviously a court has ruled

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Speaker 1: that that distinction was arbitrary and capricious. But do you

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Speaker 1: share any concern now that these products are approved, the

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Speaker 1: deed is done, these things are going to trading, especially

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Speaker 1: in light of the instance we saw yesterday in which

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Speaker 1: price has moved on false information. Do you think that

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Speaker 1: more investors, institutional or otherwise now could fall into something

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Speaker 1: potentially here that could be damaging given how volatile this

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Speaker 1: market has proven to be and how potentially easily it

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Speaker 1: can move.

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Speaker 2: If people put out false information about a traditional security,

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Speaker 2: a traditional company, the stock of that company can also

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Speaker 2: the price can also move. So this is not unique

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Speaker 2: to bitcoin or or bitcoin exchange traded products. Obviously, we

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Speaker 2: will continue to to look at the markets and at

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Speaker 2: the markets for these bitcoin exchange traded products specifically, and

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Speaker 2: if there is bad activity, we'll and it's and it's

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Speaker 2: it's within the E t P marketplace, we have authority

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Speaker 2: there to investigate and bring enforcement actions as needed.

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Speaker 3: Our thanks to SEC Commissioner Hester Purce