Crypto Overhaul: Sec Shakes up Rules with New Digital Asset Framework

We are going to make sure that we're public company capable. We want to keep building trust with our customers, building trust with our government, and so on. And so as part of that, certainly if you were a public company, we would welcome the scrutiny that we'd get from bodies like the SEC. That said, you never know when a market is going to be ready for you, or if you're going to be ready for it. And the great news about raising $110 billion, maybe a little bit more right now as we bring in financial investors, is we have de-risked a lot of that process. So it puts us into a real position of strength. That was OpenAI Chief Financial Officer Sarah Friar on this program with Maria, telling her first about intentions to take the company public earlier this year. Friar recently telling employees the company will be public next year. At the same time, rival Anthropic also preparing to go public. The company saying it can target an IPO as large as SpaceX's recorded record offering. SEC Chair Paul Atkins says the Trump administration is cutting red tape to bring more companies to the public markets. Watch this. Job one. We at the SEC are delivering on your agenda. We're making IPOs great again, to continue on your theme, by cutting red tape that discourages companies from going public. Under your leadership, Mr. President, the IPO market is booming. Since inauguration day, 583 companies have gone public, and that's up 75% compared to the final year and a half of the Biden administration. And those companies have raised an impressive $208 billion. And that's nearly four times the amount raised during the final year and a half of the previous administration. Joining me now is SEC Commissioner Mark Yojieda. Mark, it's great to have you this morning. And we're looking at these potential IPOs. It's like a wave of tech companies that are coming at us, especially after SpaceX. But OpenAI and Anthropic, these are massive. And they seem like they've been watching this market closely, waiting to see what conditions would be like. What are your thoughts on when we could see this happen? Well, I won't speak about the particulars about companies that are currently thinking about or contemplating going public. A lot of the timing is all dependent upon the issuer and their underwriters. But what we've done is a key part of this administration is to make IPOs great again. And one of the first things we did is we stopped a number of the outstanding proposals that were put forth by the Biden administration, which it seemed like it would just make going public a tremendous burden, almost making yourself a target for all of the class action lawyers out there. Why would a founder who has spent his or her lifetime trying to have some new, brilliant, innovative ideas, then go public and essentially expose yourself to now huge amounts of over-regulation, oftentimes on things that were not even related to the business? By removing those proposals, and more importantly, now thinking about how do we modernize and make sure that the 21st century SEC rulebook is properly fit for all these public companies. Now, I think many of the companies are seeing this as a sign of encouragement. Yeah. Saying, hey, this is realistic. Let's think about going public. And then they're going to look at other things like market conditions, investor appetite, both retail and institutional demand. Yeah. You can't make it difficult for them to want to come to market. They have so many things to look at. And listen, this has been driving growth right now with respect to the stock market in general. President Trump getting behind AI and saying, this is a growth driver for the U.S. economy, where the Democrats really wanted to tamp it down. The SEC is also rolling out a new framework for crypto. They want to give the digital asset companies a little more clear rules and guidelines on how they can raise capital operating in the United States. The proposal released this week would create new exemptions and safe harbors for certain crypto offerings. Commissioner, you've said the goal is to replace regulatory guesswork with clear rules. You put a framework in place and you give them a more predictable path to comply with securities law. The Trump administration has been pushing for broader crypto regulatory clarity, with Congress also working on the Clarity Act. So tell us more about the framework, because the markets do seem to think this is going to be positive. Yeah. Well, this was a big week for crypto and between the White House meeting with the president and crypto leaders, between our proposal for regulation crypto assets, as well as what the CFTC was doing with their innovation council. But really what this represents is a longstanding strategy to have a rational regulatory framework for crypto. You know, back in the Biden administration, I was a commissioner in the minority at the SEC, and we were engaged in what I view as regulation by enforcement, where the whole goal seemed to be to stop crypto from reaching the shores of the United States. When President Trump took office, and for a period I was the acting chairman, and then now back in my role as commissioner, really three immediate goals. First is stop the regulation by enforcement. We had to pull back from a number of cases where the SEC had been asserting positions, which were just not going to hold water in the new administration. Then earlier this year, the second thing we did was we issued a very important interpretation, what falls inside SEC jurisdiction and what falls outside. And now this is the start of the third step, working in conjunction with Congress. And we're very much looking at and very optimistic that they're going to pass the Clarity Act and give the president something to sign. But we have our own set of rules. It's a proposal out there, which I think is very consistent. So this would create what we call a startup exemption and a fundraising exemption for would-be crypto entrepreneurs. The startup exemption allows you to raise up to $5 million over four-year periods. You need to provide some basic disclosures, but otherwise, tell the truth, relatively simple framework to do. We have a bigger one, which allows up to $75 million in any 12-month period. There is a more comprehensive set of disclosures and ongoing reporting requirements. It's modeled after an existing role we have for also small businesses called Regulation A. The whole point was we need to take our existing framework and let's make sure we properly modify it for crypto. Some of the things in Regulation A, which is really designed for operating companies, doesn't apply in the crypto space. It's an actual process created to facilitate this whole industry. Your thoughts, Mike? Yeah, well, look, I applaud your work as it comes to cryptocurrency. I mean, you go back to the Winklevii twins. They filed for a Bitcoin ETF in 2013. If you think about the money that investors could have made from then to when they eventually got approved, and then we look at where we are now, I would say as an investor in crypto, as an advisor to investors, we welcome all the regulatory scrutiny as possible because you don't wanna invest in something as a scam, which has constantly been, I'm sure it still happens on a daily basis with all sorts of cryptocurrency, but now giving this regulatory framework, you're gonna attract massive amounts of not only retail investors, but institutional dollars. I think it's a boon and to have that home in here in America. So, I mean, I have to imagine that's the goal of this regulation. Take these things out of the dark, into the light so you can attract flow so people don't get ripped off, correct? Absolutely. You know, ultimately, the success or failure of crypto, it all depends on market participants. It is not for the government to say, this is a good investment or this is a bad investment. But our concern is that the disclosure should be accurate in all material respects. There's an absence of fraud. We police against market manipulation, but otherwise, investors have the choice, have the opportunity to decide whether or not it's for them. And for many of them, it makes it potentially, they can see themselves saying, I've got a diversified portfolio. I'd like to have a small slice of that in crypto. Do you wanna ask? Yeah, so I'm curious about Cantor Fitzgerald. They purchased the rights to tariff refunds before the Supreme Court decided to overrule that. Right now, the CBO projects that the federal budget deficit is gonna be $200 billion more than it thought that it would be in February, and that's because of these tariff refunds. Is there any concern over the fact that the Commerce Secretary's sons will triple their money based on something that is right now currently tanking treasuries? We're seeing the 30-year, even with the treasury buybacks that the Treasury Secretary has executed, it's still skyrocketing. Well, I won't discuss any specific firm or their activities, but with respect to the treasuries, we have a role in overseeing the treasury markets. In fact, one of our big projects is to implement the treasury clearing mandate, which I think will free up a lot of capital. You need to post less in margin. But with respect to the treasury markets as a whole, I can't think of a better person to be at the helm than the Treasury Secretary right now. When I look at his record and his understanding of the markets, I think the country can't be in better hands. All right. Commissioner Mark Yoyeda, thank you so much for being here. Great to talk to you this morning.