Exclusive Interview: Perianne Boring, Founder and CEO of the Chamber of Digital Commerce

An Insider’s Look at Crypto Regulation, the Long-Awaited Bitcoin ETF and the SEC’s Failure to Protect Consumers

Ric Edelman: We talk about crypto very often on this program for obvious reasons. I'm a big fan. I'm convinced that is the single greatest wealth building opportunity of this and next decade. But it's also totally new, totally different. And that's why there's so much confusion. But there's a huge amount of curiosity as well. It's why I wrote my book, The Truth About Crypto. I can tell you one of the most common, one of the most persistent questions: what is the government going to do about this? Well, I'm going to give you the definitive opportunity for getting the answer, and it's going to be brought to us by Perianne Boring. Perianne is the founder and CEO of the Chamber of Digital Commerce, which you can reach at DigitalChamber.org. Perianne, welcome to the program.

Perianne Boring: Thanks, Ric. It's great to be here.

Ric Edelman: For those who don't know, Perianne, she was named one of America's top 50 women in tech by Forbes and one of the ten most influential people in blockchain by CoinDesk. I get calls all the time from advisors and investors asking, when are we going to see a Bitcoin ETF? And you just released a report from the Chamber called The Crypto Conundrum. So tell us about the report.

Perianne Boring: Yeah, so this really is one of the biggest conundrums in the industry today, especially now that we have 16% of Americans already owning a form of cryptocurrency today. But the problem is, is that they're not able to have access to it through their financial advisors and that is totally shameful. So we spent months studying this and we interviewed over 30 participants to do a comprehensive study of what's happened over the past 10 years. It was 2013 that the first company, it was the Winklevoss twins, that tried to bring a spot Bitcoin ETF to market. The industry's tried many times and put a lot of work into it. Today we still don't have one. It's a long story, but I'll just kind of give you the spoilers. It's a political problem. This has nothing to do with investor protections. It has nothing to do with the concerns of market manipulation or potentially fraudulent activity happening on exchange. It's a political issue. At the end of the day, the Securities and Exchange Commission is run by somebody who has a very aggressive agenda, who wants to have oversight of the crypto exchanges. And he said this himself in congressional testimony when he was testifying in a Senate Banking Committee, he said he would be more comfortable with a spot Bitcoin ETF if Congress would give him jurisdiction over the Bitcoin markets. But I guess what do you expect from Washington?

Ric Edelman: Yeah, it's a sad state of affairs. It's gotten to the point that Grayscale has filed a lawsuit against the SEC, accusing them of violating their own rules in the evaluation of these applications that they are acting capriciously in opposition of what the law requires them to do. What can you tell us about the status of that lawsuit right now?

Perianne: Yeah, so we interviewed Grayscale as a part of our study, and they allege that the Securities and Exchange Commission is acting arbitrarily and capricious, which is a violation of the Administrative Procedures Act. I think it's really interesting when you have the regulators, they want to impose new rules on you, but then they don't want to follow the rules that apply to them. We really document how they have acted outside of their authority as a regulator. And we think it's really important as an advocacy organization that we ensure that the policymakers are following their own guidelines and operating within their statutory authority.

Ric Edelman: So given that this is the stance of Gary Gensler, the chair of the SEC, what do you see could be done other than simply waiting for his term of office to expire?

Perianne: Yeah, I mean, we are in a little bit of a holding pattern. So what do you do when you when you are at this impasse? So there's two paths. One is litigation. The other option is Congress. So part of our efforts is to help educate our members of Congress on what's happening. And we have delivered this report to over 100 members of Congress so far, both Democrats and Republicans. And I will tell you, we have bipartisan support, Republicans and Democrats that see this as truly an atrocity and want to use their oversight authority to address this. So I think in the not-so-distant future, maybe in the new Congress, we will start to see more conversations on Capitol Hill. So there's a lot of interest and this is something that we're pushing to make a priority.

Ric: And in the meantime, it is an atrocious situation and an ironic one because the SEC is designed first and foremost for consumer protection. And their denial of a Bitcoin ETF is actually harming investors rather than protecting them because it's like prohibition in the 1930s when they made drinking alcohol illegal. That didn't stop people from drinking. It just forced them into speakeasies where they drank rot gut and got sick, paying too much for it. That's what's happening now. People want to buy an ETF. It's the most popular investment vehicle in the country, most frequently used by financial advisors. They're inexpensive, they're liquid, they're transparent. Everybody enjoys the ETF structure. And that's naturally the way most investors want to buy Bitcoin, and it's the way most advisors want to provide that to their clients. In the absence of this, it's forcing advisors to say to the clients, I can't help you, and it's forcing the clients to go elsewhere on their own, where they're all too often falling victim to scams and frauds because they don't know what they're doing. And so the SEC, which is saying they're trying to protect consumers, are actually hurting them by denying opportunity to have an ETF.

Perianne: Well, you definitely speak our language Ric. You summarize that very well. It's classic Washington doublespeak. This has all been done in the name of investor protections. But it's very obvious at this point that this is harming investors. So it's absolutely essential that we get a spot Bitcoin ETF and other crypto ETFs to market so retail investors can invest in this new and innovative asset class with the full protection of the federal securities laws that they're currently being denied.

Ric: Let me shift the subject here. Time magazine wrote a really big story that they called Crypto Goes to Washington. It talked about how the Chamber of Digital Commerce, which Perianne you are the CEO and founder of, has been working to put digital assets in front of DC policymakers. In fact, as you know, I led a panel at your conference this past spring where Senators Gillibrand and Lummis, who are co-sponsoring major legislation on crypto, gave a presentation. Your event was the biggest policy program of the year in DC, yet hundreds of people were there, Senators, members of the House, the executive branch. So clearly there's an awareness in Capitol Hill, there's an engagement in it, there's curiosity, there's widespread support.

Perianne: Yeah, you mentioned that it's really important that we are educating our public policymakers. This is what we sought out to do when we first launched the Chamber of Digital Commerce in 2014. I have the benefit of being in this space for going on a decade now, and we've faced really the same issues. We just have new iterations of them today. Back in 2013, the industry faced pretty significant narrative issues after the Mt. Gox collapse and the Silk Road takedown. Everybody at Washington thought this was not serious; this is a total joke; Bitcoin is just the currency of criminals or it died. It was hacked. Mt. Gox failed; Bitcoin failed. That's what people thought. And we've come a long way since then. Today, we have a lot of issues with these purported lack of investor protections or lack of consumer protections. Policymakers believe that there's a lot of market manipulation happening on the exchanges and we've been through these cycles before in different periods of the industry. Education is absolutely key. According to the White House, 16% of Americans own cryptocurrency today. So as adoption increases, I think we will see more people who serve in office, particularly in elected offices, our supporters of this technology. But we have a lot of work to do to combat these negative narratives and just this misinformation. I think there are intentional disinformation campaigns to lead people astray. You've really got to do your research. Don't take something just based on what you see in the headlines. And then it's our job as the constituency to educate our policymakers about what the private sector is doing and about the promise of this technology. Because if we don't do it, there's nobody else to do it. No one's going to do this work for us. 

Ric: You know, it's really interesting. You and I both began our journey down the rabbit hole of crypto back in 2014. And over these years, I've come upon an awful lot of folks who are in one camp or the other. They're the Bitcoin believers or the Bitcoin haters, and some are still in the middle. Not sure what all this means. What I have discovered, rather interestingly, is that a lot of folks who used to be Bitcoin haters have changed their view. They've changed their opinion as they've learned more and they are now Bitcoin supporters. What I've never seen, though, in all the years I've been involved in crypto, I have never seen someone who's favorable change their mind to become unfavorable. Isn't that interesting?

Perianne: Yeah. So there's a quote that I've shared over the years from one of our advisory board members who used to be the head of the criminal division of the Department of Justice, who now works in private practice and represents companies in the crypto space. And he said, "I've met a lot of people who know a lot about Bitcoin and I've met a lot of people who are Bitcoin skeptics. But I've never met someone that knows a lot about Bitcoin and is a skeptic". So that's what we're in the business of doing, is inspiring people to want to know more, to go to a deeper level of understanding so they can make more educated and informed decisions as they're policy making. So when we look across the Congress, we've got a couple of dozen members of the Blockchain caucus, the Congressional Blockchain Caucus. So these are people who are really kind of ground zero for blockchain policy. And I would say our champions on the Hill and they're bipartisan. So it's equal Republicans and Democrats and the caucus, they've been really intentional to do that. So it's about that engagement, it's about building relationships, it's about education, and that is the journey that that we're on today.

Ric: I want to ask you one final question, Perianne. If you had a magic wand, you could somehow go back and change something. Over the last eight years in the world of crypto, what would it be? 

Perianne: So if there's one thing I could change or had done differently over the past eight years, I would love to see the Federal Reserve embrace Bitcoin. In my opinion, this is going to be a global reserve asset over my generation. I think that will happen slowly and I think it's really important for the national security of our country that we have an economic interest in this new and innovative monetary system.

Ric: That's Perianne Boring, the founder and CEO of the Chamber of Digital Commerce. And you can learn more about what Perianne and her team are doing by going to DigitalChamber.org. Perianne, thanks so much for joining us on the show today.

Perianne: Thanks so much, Ric. Great to be here.

Ric: Perianne and I actually spoke for almost a half hour. If you'd like to read, watch or listen to the entire conversation, just visit TheTruthAYF.com.