This article is a transcript of a conversation between U.S. SEC Chairman Atkins and himself at ETHDenver on February 18, 2026. Original link: https://www.sec.gov/newsroom/speeches-statements/atkins-peirce-021826-number-go-down-other-schadenfreude Peirce: It is an honor to share this stage with Chairman Atkins today. Before we begin, I would like to remind you that our statements are personal statements made within the scope of our respective official duties and do not necessarily represent the views of the Commission or any other member. Chairman Atkins needs little introduction, but I will briefly provide some background. Mr. Atkins was sworn in as the 34th Chairman of the U.S. Securities and Exchange Commission on April 21 of last year. Prior to returning to the SEC, Chairman Atkins' most recent role was CEO of Patomak Global Partners, a consulting firm he founded in 2009. Chairman Atkins served as a Commissioner of the SEC from 2002 to 2008, advocating for regulatory transparency and consistency, and promoting the use of cost-benefit analysis in institutional work. Chairman Atkins began his career as a lawyer in New York, primarily handling various corporate transactions for U.S. and foreign clients, including public and private offerings and mergers and acquisitions. He spent two and a half years in his firm's Paris office and obtained the French "conseil juridique" (legal counsel) qualification. He is a member of the New York State and Florida Bar Associations, holds a Juris Doctor (JD) from Vanderbilt University School of Law, and a Bachelor of Arts (AB, Phi Beta Kappa) from Wofford College (1980). Chairman Atkins was born in Lillington, North Carolina, and grew up in Tampa, Florida. He and his wife Sarah have three sons. Interestingly, Chairman Atkins is fluent in German and French. He may well be considering adding another language to his repertoire. Mr. Chairman, have you considered learning Solidity? Atkins: No need. Vibe coding is perfectly adequate. It's a huge improvement over BASIC-PLUS and COBOL, which I used in college. Peirce: That makes sense, Mr. Chairman. But if your AI-written smart contracts start claiming "everything is a security," we'll have to question whether it's AI delusion. A few years ago, if someone had told me I'd be standing on stage at a crypto conference with the SEC Chairman, I would have thought they were talking nonsense. But we are here—so let's get down to business. Over the past year, in the US…At the Securities and Exchange Commission (SEC), under Chairman Atkins and earlier this year under Acting Chairman Uyeda, we took numerous steps to "clarify" crypto regulation, including: proactively soliciting and receiving written responses to a set of complex questions covering a broad range of crypto issues; holding in-depth roundtables on several specific topics, including: the definition of securities, trading, custody, tokenization, DeFi, and privacy; meeting with numerous developers and builders both online and offline in Washington, DC, and at "Crypto Go Global" events across the country; providing technical assistance to the United States Congress in advancing crypto legislation; launching a new collaborative initiative with the Commodity Futures Trading Commission (CFTC) to establish a long-term foundation for regulatory coordination and cooperation in areas of shared concern, including crypto; ending the practice of "regulation by enforcement"; and publishing multiple staff guidance documents and FAQs to help the market understand what SEC staff consider to be within and outside the SEC's jurisdiction (covering mining, staking, memes, etc.). Issues included cryptocurrencies, stablecoins, and how regulated entities should follow existing rules when engaging in crypto-related businesses; repealing some unhelpful staff guidelines, such as SAB 121; issuing a staff statement concerning broker-dealers' custody of “crypto asset securities”; issuing a cross-agency staff statement proposing a taxonomy for tokenized securities; approving generic listing standards for crypto ETPs (exchange-traded products); issuing staff “no-action letters” to several projects, including tokenization and DePIN-related projects; and initiating a process for rule design, exemptions, and committee interpretation to lay the foundation for a sustainable and stable regulatory framework. Mr. Chairman, could you please give a preview of what progress we can expect in crypto regulation this year? Atkins: We have a lot of work to move forward with. In addition to continuing to communicate on the important legislative work being carried out in Congress, as you mentioned, we will also be advancing regulatory work through “Project Crypto.” This project is now being carried out as a joint initiative with the Commodity Futures Trading Commission (CFTC). As you all know, one of our own people—Mike Selig—was previously brought to the US by Commissioner Hester M. Peirce.The Securities and Exchange Commission (SEC), who served as the lead legal counsel for the Crypto Task Force in my office and is now the chairman of the CFTC, plans to work together on a number of important issues—regulatory harmonization and joint rulemaking—to create an unprecedented common, collaborative regulatory path, especially given the past clashes between the two agencies on regulatory boundaries. For the SEC, I expect the Commission and its staff to focus on the following in the coming weeks and months: A framework document at the Commission level: explaining how we view crypto assets that may constitute “investment contracts” and are therefore subject to regulation. How are investment contracts formed? And how are they terminated? Innovation exemptions: allowing limited trading of certain tokenized securities on new platforms to explore and gradually develop a long-term regulatory framework in practice. Rulemaking proposals: establishing a more common-sense, workable path for market participants to raise funds in scenarios related to the sale of crypto assets. Letters of no action and exemptions: providing further clarification, including responding to questions about whether products such as wallets and other user interfaces (UIs) need to be registered under the Securities Exchange Act; clarification will be provided for those that do not fall under registration. Brokerage Custody Rulemaking: Developing rules for brokerage custody of "non-security crypto assets," including payment stablecoins. Transfer Agent Modernization Rulemaking: Driving updates to the transfer agent regime to accommodate the potential role of blockchain in record keeping. Supplementary Guidance and No-Action Letters: Continuing to help market participants understand how existing rules apply in their specific contexts through additional guidance and no-action letters. Peirce: It sounds like a lot of work, but for us "securities rules enthusiasts," this experience is a bit like participating in the Olympics—almost as thrilling as skiing down a slope at 80 mph, performing a high-difficulty maneuver in mid-air, or doing a quadruple jump followed by a backflip on ice. While we're far less "dramatic" than Olympic champions, we do have a rare opportunity to re-examine a multitude of complex regulatory issues in the context of this new technology. This task also requires "aerial skill," and we don't want to hurt or break anything—the only thing to break down are unnecessary regulatory barriers that hinder technological progress. I'd like to take a moment to talk about "innovation exemptions." The expectations and concerns they've raised may need to be tempered.In fact, the way people are talking about it now reminds me of those who buy abandoned lockers: they're convinced there must be a rare masterpiece and a box full of gold bars inside. Similarly, some are convinced the innovation exemption will solve all their regulatory pain points at once. On the other hand, some in traditional finance (TradFi) seem to think this soon-to-be-opened locker holds a monster—one that will devour the entire traditional financial system in an ugly way. They worry the innovation exemption will allow crypto companies to disregard all rules. Both sides will likely eventually find that the innovation exemption isn't as "disruptive" as either side imagines. It will be an important step in making tokenized securities more readily integrated into the existing financial system, but it won't change the entire financial system overnight. We're still proceeding gradually—as always. The goal is to facilitate the absorption of new technologies into the system in a "naturally growing" way: enhancing the system's vitality and resilience while enabling it to more effectively serve investors, businesses, and other users of capital. Paul, could you elaborate on what your vision for the innovation exemption would look like? Atkins: I'm inclined to consider an "innovation exemption" that would allow both traditional financial players and crypto-native institutions to experiment within certain boundaries. For example, allowing market participants to trade certain tokenized securities through Automated Market Makers (AMMs), even if the mechanism may not be "controlled" by any single individual or group. In my view, market participants should be able to interact with decentralized applications on a public, permissionless blockchain, provided they are willing. However, I also anticipate that many Americans will prefer intermediaries to hold their assets and trade on their behalf. The choice of intermediaries should be made by individual investors, not by the SEC. I also want to discuss whether a "safe harbor" should be provided for participants who might actually facilitate such transactions. Specifically, I want to explore how issuers intending to tokenize their securities can work with transfer agents or other tokenization agents to tokenize the securities so that they can be traded on-chain through AMMs or other trading systems, environments, or platforms that provide decentralized liquidity. Following this potential path, innovation exemptions would set caps on transaction size (volume) and may grant exemptions to certain rules and other requirements within a certain scope—requirements that may not be relevant under the way this technology operates.Buyers and sellers of tokenized securities will need to go through a whitelist process. This exemption will be temporary, but long enough to allow us to assess whether new rules need to be developed or existing rules revised to allow such transactions to continue under appropriate conditions and to enable any interested parties to complete registration. I welcome feedback on this potential solution. Peirce: Thank you for giving us a glimpse of the lockers. There's no Picasso, but there's no terrifying monster either. It's just a gradual step from which market participants can learn and potentially help us move towards a fit-for-purpose, long-term sustainable regulatory framework. Speaking of new things, you and I have both seen some demonstrations showing us how these technologies (such as decentralized exchanges) work. What impressed you most about what you saw? Atkins: One interesting aspect of this technology is the ability to "embed" compliance requirements into smart contract code. For example, a company's founders could write their commitment to "not resell their securities for a certain period" directly into the smart contract managing the tokenized securities. Similarly, we can leverage blockchain to reimagine how issuers and holders communicate. Furthermore, privacy-preserving technologies like zero-knowledge proofs could fundamentally change how we achieve the regulatory goals of the Bank Secrecy Act. In this model, Americans wouldn't have to surrender their privacy entirely to financial institutions, and these intermediaries would face lower compliance costs. Peirce: That sounds very promising. I've always been very concerned about how deeply embedded financial surveillance is in our financial system. Americans now have the opportunity to use new technologies to protect themselves from criminals and our nation from adversaries. We should seize this moment to re-evaluate the importance of financial privacy to the security of the American people. Now let's talk about the "elephant in the room": What are your thoughts on the recent decline in crypto asset prices? Should regulatory attention be focused on this issue now? Should regulators panic, or even care about the price drop? Atkins: Regulators' role isn't to worry about daily market fluctuations; our role is to ensure market participants have the disclosures they need to make informed investment decisions. Whether buying stocks, precious metals, or crypto assets, if a person's only focus is on "the numbers always going up," then he is likely to be disappointed.Markets rise and fall under the influence of multiple factors. As regulators, our most important task is to ensure that the rules governing the asset classes we regulate provide market participants with the necessary information to express their judgments and sentiments regarding the market through decisions such as whether to buy or sell related assets. Peirce: I agree. "Number go down" is a popular slogan these days, and some crypto critics have even taken to the streets to celebrate. In German, this reaction can be called "Schadenfreude," roughly translated as "schadenfreude"—taking pleasure in the losses or damage suffered by others. Here, we might call their attitude "Ethbelowthreeglee" (the jubilation of Ethereum falling below 3,000) or "Bitcoinunderseventylevity" (the exhilaration of Bitcoin falling below 70,000). But the best response to these critics is not to frantically search for some regulatory change to make the "numbers go back up." Of course, providing clearer rules through legislation and regulation can help create an environment conducive to development. But regulation is not the "source" of value creation. You have to create things that people truly want and truly need. Only then can you gain broader support across both parties in Washington—if people are actually using something, the government will be less willing to take it away. Mr. Chairman, could you share some lessons learned from your years of experience in the capital markets on how innovators can more effectively interact with the regulatory system and successfully advance compliance and innovation? Atkins: I agree with you: in Washington, building things that people truly want and truly need, speaks volumes. If this technology is developed and applied carefully, it could have a transformative impact on the financial system as securities gradually go on-chain. For example, asset tokenization could change the financial system we know by shortening settlement cycles, facilitating the flow of collateral and dividends, enabling proxy voting, or making it easier for people to build and manage “customized, decentralized” portfolios. We are ready to partner with entrepreneurs who are committed to building a better future. I'm reluctant to repeat the often-ridiculed slogan of the previous government, but I'd still like to say: "Come in and talk to us." We won't "favor one side" over any particular asset or technology, nor will we act as your spokesperson, but we hope our market will remain open to those who offer new products and services.Our regulatory framework should not be an obstacle to innovation—especially when such innovation can further achieve our regulatory goals of protecting investors, promoting capital formation, and maintaining fair, orderly, and efficient markets. Peirce: You've struck a good balance. We're not cheerleaders for any new asset or technology, but we want the market to welcome those with ideas who are trying to improve how the market works. The SEC hasn't always been friendly enough. Improper regulation can deprive the American public of benefits they could otherwise enjoy. For example, our past reluctance to engage in constructive communication with token issuers has led to an anomaly: tokens that don't grant holders any substantial rights are less likely to attract negative regulatory attention than those that do. The consequence is that we now live in a world where most tokens don't grant their holders any rights. I hope we can reach a point where project developers are no longer afraid to design tokens that have a claim on revenue streams and are therefore securities. Paul, what conditions and changes do we need to meet to achieve a state where "people can confidently issue tokens that rightfully fall into the category of securities"? Atkins: We need to continue what we're doing—providing clearer rules and pathways on how tokenized securities fit into the existing regulatory framework and how intermediaries can operate compliantly when trading and custodian tokenized securities on behalf of clients. This work can only be done collaboratively; we welcome input from all sides, including those crypto opponents indulging in "Schadenfreude." I encourage everyone here to think about what attributes a token should possess to be truly useful to people; and then work with us to develop a regulatory framework that can accommodate and support those attributes without undermining our key regulatory objectives. Of course, this process takes time. Innovators don't have to wait until these changes are fully implemented before they start building. While we engage in broader discussions and assess whether fundamental changes to the regulatory framework are needed, communicating with us to see if there are viable compliance pathways for existing rules in your specific circumstances and business structures may be a necessary transitional step. Peirce: Paul, you're known for your optimism even in challenging environments. Do you have any advice for an audience going through a tough crypto market cycle? Atkins: Keep working hard and build what really matters.This is how you transform "Schadenfreude" into "Freudenfreude"—the genuine joy we feel when others succeed. A moderate amount of dark chocolate and Diet Coke might help, but things like Celsius and Zyn should be consumed in moderation. [Wu Blockchain]