Author| Paul S. Atkins, Chairman of the SEC

Compiled by| Wu Says Blockchain Aki

This article is a transcript of the dialogue between SEC Chairman Atkins at ETHDenver on February 18, 2026.

Original link: https://www.sec.gov/newsroom/speeches-statements/atkins-peirce-021826-number-go-down-other-schadenfreude

Peirce: I am honored to share the stage with Chairman Atkins today. Before we begin, I want to remind everyone that my remarks and his are personal statements made within our respective official capacities and do not necessarily represent the views of the Commission or other Commissioners. Chairman Atkins needs no introduction, but I will provide a brief background for everyone.

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's most recent position was CEO of the consulting firm Patomak Global Partners, which he founded in 2009. Chairman Atkins served as a Commissioner on the SEC from 2002 to 2008; during his tenure, he advocated for transparency and consistency in regulation and promoted the use of cost-benefit analysis in regulatory work.

Chairman Atkins's career began in New York as a lawyer, primarily handling various corporate transaction matters for both U.S. and foreign clients, including public and private securities offerings, as well as mergers and acquisitions. He spent two and a half years stationed in his law firm’s Paris office and earned the French “conseil juridique” (legal advisor) qualification. He is a member of the New York State and Florida Bar Associations, holds a Juris Doctor (J.D.) from Vanderbilt University Law School, and graduated with an A.B. (Phi Beta Kappa) from Wofford College in 1980. Chairman Atkins was born in Lillington, North Carolina, and grew up in Tampa, Florida. He has three sons with his wife Sarah.

An interesting fact about Chairman Atkins is that he is fluent in both German and French. He must also be considering adding a new language to his skills. Mr. Chairman, have you considered learning Solidity?

Atkins: No need to. Vibe coding is perfectly sufficient. It’s a huge improvement from the BASIC-PLUS and COBOL I used in college.

Peirce: That makes sense, Mr. Chairman. But if that AI-generated smart contract starts claiming “everything is a security,” we will have to question whether that is an AI hallucination. A few years ago, if someone had told me that I would be sharing a stage at a crypto conference with the SEC Chairman, I would have thought they were crazy. But here we are—let’s get into the subject.

Over the past year, under the leadership of Chairman Atkins and the interim chair Uyeda at the beginning of the year, the U.S. Securities and Exchange Commission (SEC) has taken many steps to “clarify” crypto regulation, including:

Proactively seeking and receiving written responses on a series of complex, broad crypto topics;

Holding multiple in-depth roundtable discussions on specific issues, including the definition of securities, trading, custody, tokenization, DeFi, and privacy; meeting many developers and builders in in-person and virtual “Crypto Out” outreach events across Washington, D.C. and nationwide;

Providing technical assistance to the United States Congress in advancing crypto legislation;

Launching a new cooperative initiative with the Commodity Futures Trading Commission (CFTC) to lay a long-term foundation for regulatory coordination and collaboration in areas of mutual interest (including crypto); ending the practice of “regulation by enforcement”;

Releasing several staff guidance documents and frequently asked questions (FAQs) to help the market understand what SEC staff believes falls within and outside of SEC jurisdiction (covering topics such as mining, staking, meme coins, stablecoins, etc.) and how regulated entities should follow existing rules when engaging in crypto-related activities; rescinding some unhelpful staff guidance, such as SAB 121;

Publishing a staff statement relating to the custody of “crypto asset securities” by broker-dealers; publishing an interdepartmental staff statement proposing a taxonomy for tokenized securities; approving generic listing standards for crypto ETPs (exchange-traded products);

Issuing several staff “no-action letters” for several projects, including those related to tokenization and DePIN projects; and initiating rule-making, exemption relief, and committee interpretation processes to lay the groundwork for establishing a sustainable, stable regulatory framework.

Mr. Chairman, can you please preview what progress we can expect in crypto regulation this year?

Atkins: We have a lot of work ahead of us. In addition to continuing to communicate about the important legislative work that Congress is undertaking, as you mentioned, we will also advance regulatory efforts through “Project Crypto.” This project is now being conducted as a joint initiative with the Commodity Futures Trading Commission (CFTC).

As you all know, one of our own—Mike Selig—previously introduced by Commissioner Hester M. Peirce to the U.S. Securities and Exchange Commission (SEC), serves as the Chief Legal Advisor of the Crypto Task Force in my office; he has now become the Chairman of the CFTC. We plan to collaboratively advance a series of important matters—regulatory coordination and joint rule-making—to establish an unprecedented joint, collaborative regulatory approach, especially considering that these two agencies have often “clashed” at the regulatory boundaries in the past.

With regard to the SEC, I expect that the Commission and staff will prioritize the following matters over the next weeks to months:

• Commission-level framework documents: explaining how we view crypto assets that may constitute "investment contracts" and are therefore subject to regulation. How is an investment contract formed? How can it be terminated?
• Innovation exemptions: allowing limited trading of certain tokenized securities on new platforms to explore and gradually establish a long-term regulatory framework.
• Rule-making proposals: establishing a more sensible and operable path, enabling market participants to raise capital in scenarios related to the sale of crypto assets.
• No-action letters and exemption orders: providing further clarity, including addressing whether products like wallets and other user interfaces (UIs) need to be registered under the Securities Exchange Act; clarification for those that do not constitute registration objects.
• Broker-dealer custody rule-making: working on rules for broker-dealers to custody “non-security crypto assets,” including payment stablecoins.
• Transfer agent modernization rule-making: promoting updates to the transfer agent system to accommodate the potential role of blockchains in record-keeping.
• Supplemental guidance and no-action letters: continuing to assist market participants in understanding how existing rules apply to their specific factual contexts through additional guidance and no-action letters.

Peirce: It sounds like a significant amount of work, but for us “securities rule enthusiasts,” this experience is a bit like participating in the Olympics—the excitement level is almost on par with skiing down a slope at 80 mph, doing flips mid-air, or completing a quadruple jump followed by a backflip on ice. While we may not be as “dramatic” as Olympic champions, we indeed have a rare opportunity: to reassess a multitude of complex regulatory issues in the context of this new technology. This task requires "aerial skills," and we do not want to injure or break anything—the only thing we wish to break are unnecessary regulatory barriers that impede technological progress.

I want to take a moment to discuss “innovation exemptions.” The expectations and concerns it raises may need to be tempered. In fact, the way people are talking about it now reminds me of those who buy abandoned storage lockers: they firmly believe there must be a priceless painting and a box full of gold bars hidden inside. Similarly, there are some who believe that innovation exemptions can solve all their regulatory pain points in one fell swoop.

On the other hand, some in traditional finance (TradFi) seem to think that this soon-to-be-opened storage locker holds a monster that will devour the entire traditional financial system in an ugly way. They fear that the innovation exemption will allow crypto companies to ignore all rules. Both sides are likely to discover that the innovation exemption will not be as “disruptive” as either party imagines. It will be an important step in facilitating the smoother integration of tokenized securities into the existing financial system, but it will not overnight change the whole financial system.

What we are still doing is progressive advancement—as always. The goal is to promote the absorption of new technology into the system in a “natural growth” manner: enhancing the system's vitality and resilience while enabling it to more effectively serve investors, businesses, and other capital users. Paul, please talk about what you envision the innovation exemptions will look like.

Atkins: I tend to think of establishing an “innovation exemption” that would allow both traditional financial participants and crypto-native entities to experiment within certain boundaries. For example, allowing market participants to trade certain tokenized securities via automated market makers (AMMs), even if that mechanism may not have a centralized entity that is “controlled” by any one person or group. In my view, as long as market participants are willing, they should be able to interact with decentralized applications on public, permissionless blockchains. But I also anticipate that many Americans would prefer to have their assets held by intermediaries, who can trade on their behalf. The decision of whether to use intermediaries should be made by individual investors, not predetermined by the SEC. I would also like to discuss whether a “safe harbor” should be provided for those participants who might facilitate such transactions in practice.

Specifically, I would like to explore how issuers intending to tokenized their securities could collaborate with transfer agents or other tokenization agents to tokenize the securities, enabling them to be traded on-chain through AMMs or other trading systems, environments, or platforms providing decentralized liquidity. Following this potential path, the innovation exemption would set limits on trading volume (transaction size) and might exempt 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 would need to undergo a whitelisting process. This exemption would be temporary but long enough for us to assess whether new rules need to be developed or existing rules revised to potentially allow such trading to continue, and allowing any parties required to register to do so. I welcome feedback on this potential proposal.

Peirce: Thank you for giving us a “sneak peek into the storage locker.” No Picasso, but also no terrifying monster. Just a gradual step, from which market participants can learn, and that might help us move toward a “fit-for-purpose,” long-term sustainable regulatory framework. Speaking of new things, you and I have seen some demonstrations showing us how these technologies (such as decentralized trading) operate. In what you have seen, is there anything that impressed you?

Atkins: One interesting aspect of this technology is the ability to “embed” compliance requirements directly into smart contract code. For example, a company's founders can write a commitment not to resell their securities “for a certain period” directly into the smart contract governing the tokenized security. Similarly, we might rethink how issuers communicate with holders using blockchain. Additionally, privacy-enhancing technologies like zero-knowledge proofs could fundamentally change the way we achieve regulatory goals under the Bank Secrecy Act. In this model, Americans would not have to relinquish their privacy entirely to financial institutions, while the compliance costs for those intermediaries would also be lower.

Peirce: That sounds promising. I have long been concerned that financial surveillance has been embedded too deeply in our financial system. Americans now have the opportunity to leverage new technologies to protect themselves from wrongdoing while also safeguarding our country against threats from adversaries. We should seize this moment to recognize the importance of financial privacy for the safety of the American people.

Now let’s talk about the “elephant in the room”: how do you view the recent drop in crypto asset prices? Should regulatory attention now focus on this issue? Should regulators panic, or even care about the price drop?

Atkins: It is not the regulator's job to worry about the daily ups and downs of the market; our duty is to ensure that market participants have the disclosure they need to make informed investment decisions. Whether buying stocks, precious metals, or crypto assets, if a person’s sole focus is on “the numbers always going up,” they are likely to be disappointed. Markets rise and fall based on a variety of factors. The most important thing we can do as regulators is to ensure that the regulatory framework for the asset classes we oversee allows market participants to gain the necessary information to express their judgments and sentiments about the market through decisions like whether to buy the relevant assets.

Peirce: I agree. “Number go down” is a popular slogan at the moment, and some crypto critics even “celebrate in the streets.” In German, this reaction can be termed “Schadenfreude,” which roughly translates to “joy at the misfortune of others”—finding pleasure in the loss or damage of others. Here, we might even call their attitudes “Ethbelowthreeglee (the glee from Ethereum dropping below three thousand)” or “Bitcoinunderseventylevity (the lightheartedness from Bitcoin dropping below seventy thousand).”

However, the best response to these critics is not to hastily search for some regulatory change to make “the numbers go back up.” Of course, providing clearer rules through legislation and regulation can help foster a more conducive environment. But regulation is not the “source” of value emergence. You must create what people genuinely want and need. Only then can you gain broader support across the aisle in Washington—if people are indeed using something, the government will be less inclined to take it away.

Mr. Chairman, can you share some insights from your years of experience in the capital markets on how innovators can more effectively interact with the regulatory framework and successfully advance compliance and innovation?

Atkins: I agree with your view: in Washington, building things that people genuinely want and need itself speaks volumes. If this technology can be developed and applied cautiously, as securities gradually move onto the blockchain, it could have transformative effects on the financial system. For example, asset tokenization could change the financial system we know by shortening settlement cycles, facilitating the flow of collateral and dividends, easing proxy voting, or making it easier for people to build and manage “customized, decentralized” portfolios. We are ready to work with entrepreneurs committed to building a better future.

I am reluctant to repeat the often-mocked phrase from the previous administration, but I want to say: “Come in and talk to us.” We will not “favor sides” on any specific asset or technology, nor will we become your advocates, but we hope our market can remain open to those who provide new products and services. Our rules should not be an obstacle to innovation—especially when those innovations can further our regulatory objectives of protecting investors, fostering capital formation, and maintaining fair, orderly, and efficient markets.

Peirce: You’ve captured that balance well. We are not “cheerleaders” for any new asset or technology, but we want the market to welcome those with ideas who seek to improve operations. The SEC has not always been friendly in the past. If regulation is done poorly, it can deprive the American public of benefits they could otherwise enjoy.

For instance, our past reluctance to have constructive communication with token issuers has led to an unusual outcome: tokens that do not confer any substantive rights to holders are less likely to attract negative regulatory scrutiny than those that do confer rights. The consequence is that we now find ourselves in a world where most tokens grant their holders no rights at all.

I hope we can reach a stage where project developers no longer fear designing tokens that are securities, thus giving them a certain claim to revenue streams. Paul, what conditions and changes do we need to achieve the state where “people can confidently issue tokens that clearly fall within the category of securities”?

Atkins: We need to continue advancing what we are doing—providing clearer rules and paths on how tokenized securities can fit within the current regulatory framework, and how intermediaries can operate compliant when representing clients in trading and custodizing tokenized securities. This can only be accomplished collaboratively; we welcome input from all parties, including crypto opponents immersed in “Schadenfreude.”

I encourage everyone here to think about what attributes a token should possess to truly be useful to people; then let’s work together to build a regulatory framework that can accommodate and support those attributes without undermining our important regulatory objectives. Of course, this process will take time. Innovators do not necessarily have to wait for these changes to be fully in place before they start building. While we engage in broader discussions about whether fundamental adjustments to the rule framework are needed, communicating with us to explore whether there are viable compliance pathways under existing rules based on your specific facts and business structures could be a necessary transitional step.

Peirce: Paul, you are known for your optimism even in difficult environments. Do you have any parting advice for the audience experiencing the tough crypto market cycle?

Atkins: Keep your head down and build something truly important. This is how we can turn “Schadenfreude” into “Freudenfreude”—the joy we genuinely feel when others succeed. A little dark chocolate and Diet Coke might also help, but moderation is key with things like Celsius and Zyn.

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