[00:00:00] Luke: From privacy concerns to limitless potential, AI is rapidly impacting our evolving society. In this new season of the Brave Technologist podcast, we’re demystifying artificial intelligence, challenging the status quo and empowering everyday people to embrace the digital revolution. I’m your host, Luke Maltz, VP of business operations at Brave Software, makers of the privacy respecting Brave browser and search engine, now powering AI with the Brave search API.

[00:00:29] You’re listening to a new episode of The Brave Technologist, and this one features Hester M. Peirce, who’s a commissioner at the United States Securities and Exchange Commission, appointed by President Donald J. Trump and sworn in on January 11, 2018. Before her SEC role, she was a researcher focusing on financial market regulation.

[00:00:46] She also served as senior counsel on the U. S. Senate Committee on Banking, Housing, and Urban Affairs, advising on securities issues. Peirce holds a bachelor’s degree in economics. In this episode, we discussed [00:01:00] the role of the SEC within the crypto space and the attitudes of the agency towards emerging technologies, outdated legislation and regulation.

[00:01:07] Do we need more, less, or just new laws? How regulatory clarity can foster more innovation, financial privacy at the cost of lost liberty, and ways that Americans can use their voice to shape government in their future by engaging with Congress and the SEC. Now for this week’s episode of the Brave Technologist.

[00:01:27] Hester, welcome to the Brave Technologist podcast. How are you doing today?

[00:01:34] Hester: Luke, it’s great to be with you. I’m excited for the conversation. I do want to give you my disclaimer before we start, which is that my views are my own views as a commissioner and not necessarily those of the SEC or my fellow commissioners.

[00:01:45] Luke: Fantastic. And that’s exactly why we have want to have you on is to get kind of like human perspective from somebody that’s really in the middle of all of this going on. Why don’t we share a bit about like how did you end up doing what you’re doing with the as you see, how do you see your work affecting the world [00:02:00] around you?

[00:02:00] Hester: Well, the latter part of that question is a big question and one that I do think a lot about, but in terms of how I got here, I ended up as a lawyer because I’m not great at math. I love economics also, but the math load and economics convinced me that I would be better off going to law school than graduate school.

[00:02:17] But I did want to do something that had a connection to markets and that also had a connection to thinking about how we can make better public policy. I did not anticipate ending up in the government. But early on in my career, I was working on securities law and realized You really need to be at the SEC to understand how it works from the inside.

[00:02:35] So that’s how I ended up at the SEC. And then I, thought, well, I never want to be a commissioner. I worked for a commissioner, which I loved, but I never wanted to be a commissioner. And then ended up getting asked if I wanted to come back as a commissioner. And I thought, well, you know, if I really want to influence public policy.

[00:02:51] The way I need to do it is by being a commissioner. So I ended up coming to the commissioner as a commissioner in 2018, which is where I’ve been. And so the question [00:03:00] about what is my role and how does it help shape the world? I’m one of five and I’m now in the minority. The commission is politically balanced with the balance being obviously in favor of the president’s party.

[00:03:13] So, my voice is often one of dissent because there are things that we’re doing that I don’t agree with. But I think it’s really a nice reflection of the American people. We’re not all unified in how we look at things. There are a diversity of viewpoints. And so having an agency that’s run by people who are able to express a diversity of viewpoints is really valuable.

[00:03:33] And while I may not be able to change a decision that we’re making now from decision A to decision B. Maybe I can shape it slightly, even if I would prefer B, or maybe I can lay the groundwork for someone coming in later and saying, Hey, maybe we shouldn’t be doing A, but maybe we should be doing B. And I think that really does play out in some of the issues that we’re going to talk about today.

[00:03:56] Luke: Yeah, and I agree. And I think that’s one of the reasons why I really wanted to have you on is [00:04:00] because you have been a voice that the community and the crypto space has turned to when enforcement actions come out. And I think there’s just a lot of misunderstanding around how this system works around what the SEC’s role is, right?

[00:04:13] And in all of this, right? Because the SEC doesn’t make the laws, right? The SEC, can you shed a little SEC’s role here is in the cryptocurrency space?

[00:04:24] Hester: Yeah, so Congress has written the, the statutes within which we operate and the statutes that we implement. We do write rules under those statutes that people have to comply with.

[00:04:35] So in that sense, we’re writing legal obligations into effect. But a lot of our job is just figuring out how, what Congress did. 90 years ago, when they set up the SEC, how that applies in the modern world. And Congress gave us a lot of leeway to adjust things as the securities markets that we regulate adjust.

[00:04:55] And then, of course, you get periods where there are a lot of new laws coming [00:05:00] into effect. We saw that with Dodd Frank and with the Jobs Act. And then our job is to implement those laws.

[00:05:05] Luke: Yeah, that’s super helpful. As somebody that’s just had that descending view on a lot of these actions, like from your point of view, what benefits do you see the cryptocurrency or blockchain technology bringing to the broader space as opposed to some of the other things people hear about?

[00:05:20] Hester: I like to make the point that as a regulator, it’s not really my job to decide this technology is good, this technology is bad, but what it is my job to do is to say, let’s let that work itself out. Let’s let people who Have ideas about how this technology might be useful in our space. Experiment with those ideas and let’s let people who are potential consumers, potential users of those products and services.

[00:05:46] Let’s let them make the decision of which ones they like and don’t like what we have done. And with respect to crypto, I think is is taken a very anti technology standpoint and almost one of saying We can’t [00:06:00] imagine how this technology could do anything positive in our space, so we’re just going to put up all kinds of barriers to it.

[00:06:08] Now, I’m being a little bit unfair. There have been some progress in experimentation in this area, but by and large, the attitude of the agency has been very much negative toward this technology.

[00:06:19] Luke: And have you seen anything like this before from a regulatory policy perspective agency perspective where things seem this hostile because I think that we’re dealing with technology here and there’s always this kind of like innovative new angle to things but like has the SEC gone through these kinds of enforcement actions in a similar way in the past that come to mind.

[00:06:41] Hester: I mean, I think this is Pretty unusual, but part of that is because there’s so much happening and a lot of it is being driven by people who didn’t grow up in the financial services sector, but grew up in the technology sector and said, Hey, we think we can do some things that might touch on.

[00:06:59] [00:07:00] Financial services, but more generally, I would say regulators tend to be pretty conservative. And I don’t mean that in a political sense. I mean, that in the sense of the status quo is easier for us to deal with because we know the players. We know that they’ll pick up the phone and respond to us when we call them and say, stop doing something.

[00:07:18] And they’re a smaller group that we can handle. and if something doesn’t happen, no one’s going to blame us for that because they don’t know what those developments are that could have happened that could have made our world better. So it’s almost easier and safer for a regulator just to say, no, no, no, all the time.

[00:07:35] And so you have to have a culture at the regulator that desires to move past that. And to be fair, I mean, often when things go wrong, people do come running to the regulator and say, why did you let that happen? So it’s, natural. I think the classic example, it’s not an SEC example. an example from the Massachusetts securities regulators who said when Apple first started that they couldn’t sell in Massachusetts again, and I’m making no comment [00:08:00] on the, company, of course, but I think a lot of people point to that and say, you know, as a regulator, standing as a merit regulator doesn’t make sense.

[00:08:08] Should you, when a new company comes in, to make sure there’s disclosure out there so that people can understand the risks of investing in that company? Of course. That’s our job as a securities regulator. But our job is not to say, no, you can’t buy company A, B, or C. That’s not our job. At the SEC, I have seen a lot of instances where I think we could be much more forward thinking on innovation.

[00:08:31] That’s one of the reasons I wanted to come back to the SEC. Even in the area I used to work in, which is investment management products, like mutual funds, I think we could have been as a regulator and we could be still much more open to innovation. In products that people want to offer in that space and also in how people make disclosures so that investors who want to purchase those products can better understand what the risks, benefits, costs of those products [00:09:00] are.

[00:09:00] So I think we definitely have a lot of room, but the crypto space has been remarkable just in this space. In the clash between the people coming from outside the financial world and then the, you know, the traditional financial world. Now you see a little bit more where people in the traditional financial world are saying, Hey, there are aspects of this technology that we think are interesting, and we might want to use those, and then you start to see bigger efforts by the traditional financial players to push the agency.

[00:09:26] Luke: Yeah, it definitely, it seems quite a bit different from other things in that, you know, the technology has all these use cases kind of on its own as a technology that aren’t necessarily financially or investment related. And then, but there’s also these incentive models that make it different too.

[00:09:41] There’s always bad actors in these spaces, especially with emerging things and speculation and things like that, that, you know, are kind of part of a natural nascent technology introduction to the market. So it’s definitely a lot of balancing act. Especially working on a project that, you know, has been in this space, it is a lot of times, I don’t know, sometimes [00:10:00] lawyers and accountants are probably the best benefactors for these things, but it feels like a lot of times you just end up playing it a little more cautiously you could or should, just because you’re not necessarily sure of what’s going to happen with how, whether law changes or enforcement actions shake out a certain way.

[00:10:16] Hester: I mean, that makes me a little bit sad to hear, which I’ve heard that from other people too, right? They’re always in the back of their mind when they’re thinking about How do we want to develop the project? What’s the next step? They’re always thinking, I’ve got to protect myself from potentially getting in trouble, which, of course, you want people to think about that, but there should be less time that needs to be spent about thinking about that.

[00:10:38] Right? we obviously, if your goal is to rip people off, we want you to be very, very much know that that’s not going to fly here. But if your goal is to try something new, And you just are concerned that, well, I might trip up on something that I didn’t, I didn’t understand how the SEC would come in five years later and interpret this.

[00:10:56] That’s not ideal. We want to have enough clarity that people [00:11:00] feel the confidence to really push forward with the innovative part of their project. That’s a balance for any committee. Thank you. Jurisdiction any country to come up with a set of laws that allows people the comfort to innovate, but also make sure that you’re providing the protection that you want to provide for your citizens in that jurisdiction.

[00:11:21] So it’s a push and pull, but I think we’re in the wrong place now, because I hear too many people saying what you’re saying, which is this sort of they’re just so cautious about moving forward because they’re so scared. They’re going to trip on a trap they didn’t know was there.

[00:11:35] Luke: Yeah, yeah, totally. I mean, to that, I think you hear kind of two sides of the debate a lot out there. Some people saying very much opposed, like, we’ve got plenty of laws in place, like we don’t need more laws. And then the other side of the aisle, We’ll basically say we’re working off of securities laws from almost a hundred years ago, right?

[00:11:53] We need more laws to balance this out from your point of view, just as somebody in this and as an observer [00:12:00] too, do you feel that you’re well equipped with rules or, or laws, or do we really need to kind of come up with something new with Congress around framework or something like that related to cryptocurrency?

[00:12:11] Hester: Well, I am grateful that Congress taken a look at this and that there are a number of people in Congress who are very interested in this issue and they’re trying to think through it. I think there are areas where we could be doing things under the laws that we already have. We could be providing guidance about when something might actually be a security versus when something is not.

[00:12:32] There may well be areas that are not covered by current federal law. And then there’s a question of, do you want to set up a regulatory framework for this thing? You know, whether it’s platforms that trade crypto assets, do you want to have a federal framework for that? And if you do, then Congress needs to think through who the regulator should be.

[00:12:54] And so there are places where you might need to have a new law, which, which I think we’ve seen [00:13:00] some bills out there that would address some of those things. I think we as a society need to have a conversation about 1. Is there a regulatory gap? And then 2. Do we want to fill it? And 3. Do we want to fill it with a federal regulatory framework?

[00:13:12] And you might answer no to those last 2 questions. Just because there is a regulatory gap doesn’t mean we have to jump in to fill it. But again, that’s a debate that’s a little bit beyond me because I’m just a regulator. And I do, if Congress gives us the authority to regulate these platforms or whatever actor in the crypto space, then we’ll do it.

[00:13:33] Luke: Yeah, no, that makes sense. And I think a lot of this, you said something earlier too, around like letting the space kind of find its way a little bit or experiment a little bit, you know, and kind of find that because even putting aside policy, there’s this ongoing, like, what is the product market fit for crypto going to be when it comes to like things like mass adoption and how will people actually end up using this versus how it’s being used now?

[00:13:55] And I feel like the market itself is still trying to find its way there a little bit. And, you know, I think that’s [00:14:00] probably where a lot of Push back on this originates from because like, Oh, well, you, you don’t want a pigeonhole in industry either when it hasn’t really had enough time to cook in the market and kind of find its way.

[00:14:09] Right.

[00:14:09] Hester: I think that’s a very important point actually. And I think you could end up with a, have a view of where things are now and you set up a regulatory. Framework around that and then it turns out that a lot of the uses maybe are non financial uses at the end of the day. You know, you might have a social network built on a block chain.

[00:14:26] How does that get regulated? Certainly not the same way that you’re regulating a stable coin, right? So you’ve got to be thinking about keeping it open enough that people can experiment. I think one of the reasons that the market has really been struggling to find that those use cases is because the it.

[00:14:43] Regulatory framework is so toxic right now, and I think you would actually see more use cases emerge if you had more regulatory clarity. So that’s the other side of it, right? You want to have enough regulatory clarity that people can actually try the [00:15:00] interesting things. And then you want to also not have so much that you straight jacket the industry into being what it is today.

[00:15:06] But when I meet with people who say. You know what? I am not doing something that I would like to do because I’m worried that it might trip the securities laws and the something they want to do has absolutely nothing to do with securities or the financial system. It’s very sad to me because I’m thinking, well, we’re losing out on the value of.

[00:15:26] The thing that that person was trying to do, because when you think about it, the technology is a way to coordinate human activity among humans that don’t know each other and that don’t need to know each other. And that’s a very powerful technology. Now, whether it ever turns into something that changes, All aspects of our lives or not.

[00:15:46] I don’t know, but I can see how it could be quite transformative because we haven’t really had a way to coordinate people who don’t know each other the way that something like crypto technology can.

[00:15:59] Luke: [00:16:00] It shouldn’t have to be this toxic, right? I mean, I think like even looking before recent years, having a product in the market, you know, we actually look to the SEC guidance that was put out in 2017 around token projects and things like that.

[00:16:12] And actually we’re working from that to make sure that we were framing our policies correctly. We were looking for that guidance, like kind of in an ideal world, how would the SEC engage with this industry? How could this be different, I guess, is what I’m framing it from your point of view, if it were less toxic.

[00:16:29] Hester: Well, I think part of it is this bringing people together in a public setting so that you’re not favoring a few large industry players, but you’re really letting everyone come to the table. You’re letting consumer and investor advocates be part of that conversation. You’re letting people who want to use the technology, people who are trying to, you know, entrepreneurs who are trying to do something with it.

[00:16:51] Everyone coming together. In a roundtable setting or through written products, right? Having we could put out a [00:17:00] concept release to say, hey, this is how we’re thinking about where the regulatory challenges are in this area. Help us think through how we might want to solve those and then also having that line of communication where people really can come in and talk to the regulator, tell us about what they’re trying to build, because that helps us then think, okay.

[00:17:18] Here are areas where we can draw lines and say this stuff is clearly outside of the SEC’s purview this stuff. There are more questions. Maybe it’s inside the purview. Here’s where we need to make some adjustments again, using the authority. We have used that exemptive authority to allow people move forward in a commercially viable way.

[00:17:37] So I think it’s that combination of. Public dialogue about this and really encouraging that and also encouraging people to come in and tell us about their projects and not suggesting that they’re going to come out the other side with an enforcement action, but they’re going to come out the other side with a viable path forward in a timely fashion.

[00:17:56] Right? Because you can’t tell people to come in and talk to [00:18:00] us. And 5 years later, You might have a path forward because the project is going to be gone in 5 years. It’s not going to still have funding in 5 years. We have to move faster. And so there are things that I think both sides can do to create that kind of environment.

[00:18:15] If a founder is coming in and talking to us, you’ve got to be prepared to answer the questions we have. You have to be prepared to think through how it might slot into existing regulatory. Precedent and you have to be willing to come back with answers. So we’re not going to be your lawyer. You should probably have talked to someone who can help you think through that.

[00:18:33] But on our side, we also have to be willing to engage proactively. And I think that’s really an area where things have broken down.

[00:18:40] Luke: Yeah, I agree. On that track, but also switching gears a little bit, we work in privacy and we work in crypto and all these different things. And so we deal with different types of policy and regulatory agencies.

[00:18:50] And one thing I always kind of wonder about is like, and this is totally anecdotally, how much do people in, from what you’ve seen in the, the agency actually like, Use the [00:19:00] technology or, or, or follow it? Or is it like in a corner somewhere over here like this little cryptocurrency division where maybe there’s like three or five people?

[00:19:07] Or do you see, like, are people actively playing with these tools or, or actually researching or, looking into these things at the agency? Or is it more of just kind of seeing what happens and does this follow the law or not? I’m just kind of curious.

[00:19:19] Hester: Yeah, we do have a lot of people who are quite knowledgeable.

[00:19:21] We have a our FinHub is our office that has a lot of people who have, you know, deep technical knowledge and they’re playing around with things. And then we obviously have our, as everyone knows, we’ve got our enforcement unit that’s dedicated to crypto and cyber. So there’s a lot of knowledge there as well.

[00:19:39] And then scattered throughout the way the SEC is set up. A lot of people know the Division of Enforcement, but we have rulemaking divisions that concentrate on writing rules for different areas. And within each of those divisions, you have people who know quite a bit about the technology. That said, you know, I think we tend to be very, again, [00:20:00] very conservative about what employees are allowed to do.

[00:20:03] So there are limitations that I think are probably not. Particularly conducive to people getting deep knowledge of things. I mean, I’ve had to get a lot of my knowledge through listening to podcasts, right? Because I can’t myself play with the technology and that is unfortunate. I wish I had done a lot of that before I got to the SEC so that I would have deeper knowledge.

[00:20:29] At some point that is going to have to change because at least I think that crypto will be something we encounter in a lot of day to day interactions. And so I don’t know, you know, if, if you’re, you know, Vehicle title is on a blockchain. You can’t avoid crypto if you want to have a car. So there are all these kinds of places where where I think it’s going to end up being problematic.

[00:20:54] But you know, it’s always difficult for a regulator with a new technology. And you want to make sure that when we’re making [00:21:00] decisions about the technology that we’re not conflicted. And so that’s why we have to have rules around that.

[00:21:06] Luke: And it’s such a challenge too, I would imagine. The United States is such a leader on this technology front globally, and at its core, this is a global technology too.

[00:21:15] So there’s this kind of nation global conflict of like, these rules are likely to get adopted here, and these other countries that will likely follow suit in some similar way, but also like, This is accessible to everybody too. So like, I think that’s one of the tricky things. I mean, you know, being somebody in the space is just, okay, are we, were we geofencing things out, you know, which is just kind of a bummer, but it’s definitely tricky and to get to that place where it is less toxic, like as a citizen or in the country or people who might feel powerless.

[00:21:47] Is the best way to like, engage with your Congress people more on this? Or like, what way can people get active to try and shift things in a more positive direction?

[00:21:57] Hester: Americans should use their voice to shape [00:22:00] their government. And whether that’s by talking to their representatives, in Congress or talking to us as regulators.

[00:22:06] And when you see something coming out of the SEC talking to us about how that will affect you and what you want to do day to day, because we may not even have thought of that. And so we have a process where when we put out a rule, someone can write a comment letter to us and you don’t have to be A company to write a comment letter.

[00:22:25] You can be an individual who writes a comment letter. It doesn’t have to be a formal thing. You can just write us an email. I do encourage that. And I have found it very valuable when people have come to talk to me to tell me about what they’re building, just to get a sense of what’s out there and what’s important.

[00:22:40] When I’m wrestling with issues, around trying to think about how the technology might fit within our rules or might conflict, or if there might be something I can advocate for that would make people’s lives a lot easier, who are trying to build something. Those kinds of interactions with people really shape my [00:23:00] thinking.

[00:23:00] I’m sure that’s true of my colleagues too, so I encourage that. But I really do, you know, this, the government is supposed to be working for the American people, and, and so it’s hard to do that if you don’t come talk to us.

[00:23:12] Luke: Yeah, yeah. I think people forget about that, too. Changing gears slightly here, you know, as we talked a lot about cryptocurrency, another thing we put a lot of focus on, too, is the AI space.

[00:23:21] It’s just been a booming part of the market. Obviously, there’s investment angles on this. There’s uses of AI with investment in securities, etc. Like, you know, Is the SEC spending time looking into AI? Is it becoming something that a lot of policy focuses or enforcement focus is going in on? Like, how has that changed the dynamic in recent past couple of years when that’s been booming?

[00:23:44] Hester: Yeah. I mean, so AI is not new in the financial space. It’s been something that firms have used, trading firms have used for a long time, but there’s certainly a lot of new innovation in the space that makes it much more accessible and usable by people. All kinds of people, including [00:24:00] people in the financial industry.

[00:24:01] And so we certainly are seeing applications of it. So there are a couple places, I think, where the SEC is kind of engaging with it. One is there are a lot of people who are out there just the way they did with crypto when Yeah. Yeah. Yeah. Or blockchain, when blockchain was the term that everyone wanted to use, people were using blockchain just to raise a lot of money and run away with it.

[00:24:23] There are some people who are doing, oh, I’m running, I’m building this new AI project, and then they raise a lot of money and run away with it. We’re watching out for that kind of thing, obviously. But then there is the question of whether a financial firm, in using AI needs a special kind of regulation.

[00:24:42] So we put out a rule proposal. It’s been a while since it came out, but it’s, it’s out there. We haven’t adopted anything yet. It was motivated by AI as it was written, probably applicable to a lot more technologies than just AI. But could make it really [00:25:00] hard for financial firms to use technology to serve retail client.

[00:25:03] Well, not only retail, but to serve clients. So investment advisors and broker dealers serving clients. And I think we have to be very careful about that kind of regulation that Puts a barrier to using technologies like that. When I think about the United States capital markets, one of the things that makes me saddest is that we don’t have all of the population participating in those capital markets.

[00:25:28] I want to see more people participating as investors, people drawing capital from the capital markets and investing in those markets. And I think that’s the When I talk to firms, one of the things they say to me is it’s really hard for me to serve a clientele that’s not ultra high net worth because it’s so expensive to serve them and the regulatory risks of serving that population are actually really high too.

[00:25:51] But here’s a place where artificial intelligence and other kinds of technologies can be extremely transformative and can make it cost effective for these firms [00:26:00] to serve clients. All of the american population and so i want to make sure that we’re not preventing firms from using technologies that enable them to do that we need to be careful and i think it’s kind of funny when we think about our artificial intelligence and we say oh you know it’s so hard to regulate artificial intelligence because we don’t know what’s going on in the black box but how much more true is that when you’re talking about a human being.

[00:26:23] We have no idea what’s going on in human minds, and so I think we should just chill out a little bit. There are risks, of course, around AI that we can all think about. We have to be cognizant of those risks, but we can’t be scared of it. And then I think a, a final point I would say is that we can use AI ourselves in doing our job better as regulators, and we should be looking into that and thinking about that.

[00:26:48] However, as a regulator. With the powers of government, we need to be careful because you can easily set up a surveillance state now where you’re watching everything that everyone does in the [00:27:00] markets because you can plow through that using AI. But that may create a type of government surveillance that is really antithetical to what the United States stands for.

[00:27:11] So we should be putting in protections very early on before we go too far down that road.

[00:27:17] Luke: Well, that’s refreshing to hear you say that as somebody working for a privacy company. I think people also lose the sight of things like cash is just used in your wallet and you don’t have to identify every person on every transaction in a cash exchange either.

[00:27:33] It’s, it’s it definitely, I mean, so many things that just kind of come to mind when in that last statement too, around like these rules could apply to other things. As when working in the space, you hear about how we test and how, you know, these new technologies are applying to things like walk like a duck and quack like a duck, right?

[00:27:51] Like all these funny little kind of sayings, but it’s true. Like these are versatile things that apply to a lot of different stuff. And I think that that’s one of the areas where, [00:28:00] you know, people really should keep that in mind with these things too, is that once something’s a rule, it’s a rule. It could apply to many things, right?

[00:28:07] Hester: Yeah, but I think that sometimes when a new technology comes along or a new type, a new way of doing things, it is an opportunity for us to think about those existing rules and think, do they really even make sense? Because we’ve been doing this for a while. And that’s one of the things that I’ve been thinking about in terms of, The how we test right we have to think about what do we want the sec to regulate and if a broad interpretation of the how we test as broad as we’ve interpreted it with respect to crypto if you apply that it could apply to a whole range of things i mean i’ve raised this point with my.

[00:28:41] Colleague, Commissioner Ueda, we wrote a dissent and said, you know, it could apply to Star Wars collectibles. Do we really want to do that? And if not, maybe we should think about ways that we can really focus SEC resources on the areas we think they’d be most usefully applied. And I think that’s, that’s true [00:29:00] too, when we think about privacy, financial privacy is something that over the years we’ve, we’ve sort of given up ground on that as an American people.

[00:29:08] And we’ve said, you know what, we’re okay with the government looking at all of these transactions. And as you point out, Luke, we have cash where. you know, people have the ability to transact without someone watching them. We should be thinking about how do we carry some of that over into the new forms of payment.

[00:29:29] And again, it’s not to say that the concerns of the government around stopping illegal activities are not legitimate. They absolutely are. But we also have to think about the cost, both in terms of dollars, of putting in extensive surveillance, but also the cost in terms of lost liberty and privacy, which are really important concepts for us.

[00:29:49] And so I think this can be a time for us to kind of have that conversation afresh as an American people because we have new technology and we’re trying to figure out how this [00:30:00] all fits together and thinking about ways where we can really, Achieved the important objectives that the government has in stopping bad actors, but also preserve these things that we hold.

[00:30:11] So dear in the United States. So that’s what I’m excited about that. A moment like this can be really a moment for us to come together and hash that out in lively public conversations.

[00:30:23] Luke: That’s fantastic. You know, I, it’s really great to hear that too. You’ve been extremely generous with your time and we’re, we’re really appreciative for you coming on and kind of giving your point of view here.

[00:30:33] Is there anything we didn’t cover today that you want people to know about or, or, or would like to get out there that we might not have covered?

[00:30:41] Hester: Well, I think just, I’d like to underscore one thing, which is this, this idea that people really need to be part of this process. I know that a lot of people have been very frustrated with.

[00:30:50] My agency in particular, but more broadly with just the policymaking around around crypto and and maybe there’ll be some similar [00:31:00] frustrations around AI. And so I think that it is helpful to point out the problems, but it’s also helpful to think about solutions. So I want people to be thinking about if you were sitting in my seat.

[00:31:14] If you were sitting in the seat of someone else at one of these other regulators, what is it that you would be doing? What do you think a good solution is? And so really putting some of the energy that we all spend criticizing things, thinking about what workable solutions are, and so, you know, I welcome conversations about those things, and I think that having some of those solutions ready to go when the moment changes, when someone says, Hey, maybe there’s a different way we can do this.

[00:31:41] If you have a workable solution, that’s great. And when you’re developing those solutions, try to develop solutions that are going to be good for the long term that are not going to compromise some of these fundamental values we’ve talked about. But are also going to be able to achieve the regulatory objectives that we all want to achieve.

[00:31:59] [00:32:00] Thinking about those things now, I guess, is what I would underscore. Happy for people to come talk to me, CommissionerPurse at sec. gov. I always welcome the chance to, to learn from people.

[00:32:11] Luke: Awesome. And are you out there on on X or LinkedIn or anywhere else? I am. You

[00:32:16] Hester: can find me, Hester Purse. I’m not a, I’m not a very prolific poster, but I do post every once, once in a while.

[00:32:25] People

[00:32:26] Luke: share what you put out there in the world, I think, in a good way. Again, I can’t thank you enough for taking the time to come here as one thing, especially in these times, seeing you out there at conferences and engaging with the space. It’s really, I think it brings a bit of hope to everybody that’s working here.

[00:32:41] And I really, really appreciate you coming in. And I’d love to have you back sometime, too, to revisit some of these things as things move along.

[00:32:48] Hester: That sounds great. You’ve been so gracious. I appreciate the chance to talk with you.

[00:32:52] Luke: Thank you very much, Commissioner.

[00:32:53] Hester: Take care.

[00:32:56] Luke: Thanks for listening to the Brave Technologist podcast.

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