Ep 140: SEC Chairman Paul Atkins on Making IPOs Great Again, Crypto's Comeback & New Rules for Retail Investors

President Trump said he wants to make America the crypto capital of the world. The SEC started by looking at crypto as maybe the ostrich with the head in the sand. We reversed course on that. We're now embracing it. We have now an opportunity to make our financial system on-chain. A lot of people get angry at me. They say, Joe, you're building these companies. I'm not allowed to invest in them. We are tackling that. I think that it can and should be done. We have about half the number of public companies as we had 30 years ago. The goal is to make being a public company cool again. There's a lot of reasons it's annoying to be public. We don't want a random shareholder lawsuit. What we're doing is... So we're sending this clip to Governor Abbott and to Elon, and we're going to fix it for everyone. Paul Atkins is the chairman of the SEC. He has a very different philosophy than his predecessor, Gary Gensler. Gensler took an adversarial approach that a lot of people thought was very unfair in the tech and crypto world. Wouldn't define the rules ahead of time. Paul's 180 degrees different. He wants America to be the crypto capital of the world. Paul Atkins wants to make IPOs great again. And you know, also really important to me, Paul wants to let the middle class access the innovation world, that people actually invest in what we're doing in this AI wave, I think, which is really important for our country. Paul's a really creative thinker, really bold guy. I think you'll enjoy hearing from him. Welcome to American Optimist. Really excited to have Paul Atkins here with us today. Chairman Atkins, you're a commissioner at the SEC. The president's made you the chairman. And I guess in the 90s, you worked with chairman in the past. You were on the commission before, 2002, 2008. And now you're in charge of the SEC. And you're here at UATX in Texas. Why are you in Texas today? Well, thanks, Jim. It's great to be here with you today after we've known each other for a while here. So we're here in Austin. We had a roundtable, so decided to get out of Washington and go to the heartland and talk about issues around trading rules in the stock markets, basically the equity markets. We had the stock exchange here in Texas getting started. Exactly. That's right. And so, we were here. It was really good to get input from all sorts of market participants, as we call them, meaning brokerage houses, investment folks, and all of that who trade actively in the markets. And so, they had a lot of good things to say about some issues that we really want to tackle here over the next couple of years. Awesome. Did you get to meet any students or professors here at the University of Austin? I did, a few. Yeah. So, the students are out of class now. They already had their exams, but did meet some faculty members and the president of the university. So, that's great to see what they've been able to accomplish in a relatively short amount of time. Awesome. Well, we're trying to breed warriors here that share the values of pro-America and making these things functional. Because we're here in Texas, I have to ask you about our new business courts, by the way, as well. This is something that I'm excited about. What do you think about companies coming to Texas instead of Delaware? Is that a thing that should be happening? Well, I think it's great to have trading of public stocks all around the country. And we're a big country after all, and it doesn't necessarily just have to be in one place. And it doesn't have to be in one state. Let's let the states compete with each other to get companies in. I don't think it's a race to the bottom because after all, you have investors and others on the outside who are very discerning and they decide after all what makes for a good company and what policies matter. Awesome. Yeah. Well, as an investor and as someone who builds these companies. As they get to be big companies, I don't want them to be able to be ridiculously harassed by random small shareholders. I want it to be fair. So, I love that we're shifting and trying new rules for that right now. This is your third stint at the SEC, we said. You're now the chairman. Looking back, how have US markets evolved? What were the big challenges 30 years ago versus what we're seeing today? It's amazing. Things have changed a lot. 30 years ago, so in 1990, say the late days, 1990, still 50% of the capitalization on the U.S. stock exchanges were held by individuals directly. That means people like you and I or whoever would go out and buy directly through a broker, a share of stock of whatever, IBM, Exxon, or whatever it is. Now that's really changed. So now it's completely reversed. And so that was about half and half back then. So now it's the institutions, so meaning insurance companies, pension funds, mutual funds, ETFs, people, things like that. It's like Vanguard and State Street and these big players. Right. Who are – they're basically advisors for these funds. So, anyway, so now that way of holding shares has become the predominant way that individuals don't hold it directly, but they hold it through these intermediaries. So, that's been very interesting, has created a lot of interesting developments in the marketplace. It's difficult for companies to know exactly who owns their shares because a lot of times they're held through brokers. Interesting. And street name, and then you also have the big funds and the institutions. Yeah, it'll say your shareholding is 8.7% Vanguard, but really that might mean any number of people who own that underlying thing or that sort of thing. How does that change your job? Well, so it just means that the relationship between companies and their shareholders is different. And it makes the role of these intermediaries even more important as far as disclosure and the rules that govern how they interact with their customers, their investors, and the duties that they have. And so one of the main ones is fiduciary duty, which means that it's the highest level of care that a service provider has to his customer. And he has a very high duty under law not to put his own interests ahead of his customer's interests. And it's interesting, too, because in the old days, I guess you'd get to vote your shares how you wanted, but now there's someone else voting your shares for you, and they're listening to these very large institutions telling them how to vote. So, I think there's some interesting, complicated things going on there. Yeah. So, things have evolved that way where the big institutions want to focus on – well, A, they want to keep their fees low because that's a very competitive issue. And investors properly are looking to find a low-fee structure to invest their money because the compounding of dividends and interest, depending on what you're invested in, over time really adds up. So that's where we need to keep focused from a regulatory perspective on allowing people to focus on fees and keep the fees low and not overload the service providers and intermediaries in the marketplace with extraneous burdens that wind up increasing fees and ultimately hurt investors. That's the kind of stuff that I call the leftist activist nonsense. So maybe you don't use those words. But many of my tech friends, speaking of that, were really turned off. Even some of them turned off against the left overall because of the adversarial approach of Gary Gensler at the SEC and the previous administration. A lot of activist stuff, a lot of ways of not defining the rules when he's trying to crack down on certain things. Because it seemed to us like he just didn't like some of those people in crypto or whatnot. But can you explain how your philosophy differs, especially on issues related to innovation? Well, so the SEC traditionally, it was started back in 1934 by Congress after the big market crash of 1929. FDR brought in RFK's grandfather to start it off, he said, right? 91 years ago. He did. So throughout the years, SEC was never, I'd say, at the vanguard of pushing innovation and that sort of thing on the marketplace. But at the same time, was never kind of blocking it, just standing athwart progress and blocking the street. So one example is when I was a young lawyer and just joined the SEC in the early 90s. One day, the chairman, Richard Breeden, came into my office and had a big stack of files and said, can you find out why this hasn't been approved yet? And that was the first ETF exchange-traded fund. And that was called SPIDERS. That's the S&P 500 index. And the attitude was to make sure we approve it. Well, the attitude was like, why is it still here in the building? Because apparently it had been there for like three years or something like that, not being approved or yay or nay either way. And so anyway, the staff of the commission basically said – when asked about it, they said, well, we don't know if the market will accept it. And Richard said to them very, I think, in a good way, he said, well, how do you expect we're going to find out if they'll accept it? So you have to approve it to issue it. So the staff – so Richard gave them some like 10 days. If it's not out in 10 days, I'll do it myself or something like that. So the staff wound up approving it, of course, and went out. And it did have a rocky start because the market wasn't quite sure that the whistles and bells of the program would work. But then it really caught on, and obviously, here we are now, 35 years later, and see how things have really advanced. ETFs are the backbone of the marketplace to a large extent. And then now crypto. And so, to your question there, unfortunately, the SEC started by looking at crypto as maybe the ostrich with the head in the sand, as was their attitude. Like, maybe this stuff will go away by the time we lift our head out of the sand. That obviously didn't happen. And then came the very basically regulation through enforcement where the decision was made apparently that we don't like this new technology. We think that you're going to encourage money laundering or who knows what, illicit finance and that sort of thing. And that we're going to ask the industry to comply with the rules and regulations from an antiquated era that really weren't opposite to the new technology. It seemed to a lot of us that they were purposely trying to kill things. They're purposely trying to shut things down. Maybe you can't – I don't know if it's an appropriate question. But it seemed like they're trying to say you have to do this in order for them to go after it and attack it. That's what it felt like. Yeah. Well, so I mean you can draw your own conclusions. I really can't really say one way or another, but let's just say that we're finding right now we've changed from regulation by enforcement ethos to an embracement of technology and innovation. And so the trouble with the past practices of the commission is that it drove trading of crypto assets offshore And so people are going to do it The internet is worldwide You can stop people from doing it You can forbid it And so, Sam Bankman-Fried and FTX is one example where- They went offshore. They went offshore to the Bahamas. And so, one example of how a good regulation can help in that respect is that FTX bought a company called LedgerX, which is a swaps trading platform for crypto assets. And so swaps are a type of futures product. And so this was regulated by the Commodity Futures Trading Commission. It was onshore here in the United States and a subsidiary of FTX. So when FTX imploded, LedgerX didn't really miss a beat. And they had segregated accounts. So every customer's assets were accounted for and nothing, as far as I know, was lost. And so then LedgerX has survived and now was sold out of the bankruptcy estate and so lives on. So some of these well-regulated functional areas of the economy, it's actually better for all the people who actually are participants. Exactly. So if you have clear rules that are tailored for the particular instrument, then that sort of innovation can survive and thrive or fail, and it'll be up to the marketplace, not for the government to choose winners or losers, and not for the government to substitute its own judgment as a merit regulator for investors. This is a really great point because I think there's two different spectrums being argued on here. One spectrum is how tight or loose should the rules be, like what should the rules be to regulate it? And some of us believe they chose rules that were so tight that it actually made it impossible. But the second argument is how much should we tell you what the rules are versus how much should we tell you afterwards what the rules are, which it seems like you're a fan of being really clear up front as much as possible. Transparency is the best policy. And so I think that has served the United States really well. Well, this is why our markets are the largest and the most vibrant and deep and liquid and blah, blah, blah in the world. And now the United States, the capitalization of our equity markets is fully half of the entire world's capitalization. That's up from 30 percent from 30 years ago. So if you have good rules that are fit for purpose and you kind of tend your garden, don't let weeds grow up. And that means the riffraff that will come along and lie, cheat, and steal. So you need to have a vigorous policeman on the beat, of course, because it's human nature to do otherwise. But also to make sure that you are not overloading the system with rules that are antiquated. You're just not providing what they're meant to provide. So you whittle it down to what is the proper prescription for what you're trying to avoid. I love that. I mean that's very moderate in a lot of ways because there's people who are more authoritarian and want to crack down. There's people who are more libertarian and don't want as many rules or any rules at all. And then – so, you're in a moderate stance, but you're very pro-transparency in allowing innovation. So, that's a great combination. So, if we have – and there are lots of rules that need to be revised, gotten rid of or whatnot. So, I compare it to a boat. The real goal is to make sure that if you have a boat, that at least once a year, you go and scrape the barnacles off the hull so it can actually move through the water quickly and not get bogged down by things that impede its progress. So that's what we want to try to do with respect to regulations. We've allowed over the years things to build up over time and without going through and pruning and weeding the garden for things that are no longer needed. I love it. I love it. Well, that sounds very reasonable. I want to get to some of the more aggressive stuff as well. You have a lot of really good reasonable stuff we're going to go through, which I really appreciate. You're being a very responsible leader. I think there's some more aggressive stuff that I'm excited about. And I think one of them is interesting is the company bylaws and what you can agree to ahead of time in a company. So through the corporate governance system is where a lot of this comes up. So what my goal is here, I mentioned that today we have about half the number of public companies as we had 30 years ago. And so what we're trying – what the goal is is to make it being a public company cool again. And so – because right now you have a big, robust private equity, private capital market. And so that makes it comfortable for companies to graduate from VCs to private equity. We don't want a random shareholder lawsuit. I mean, every time SpaceX launches a rocket, it doesn't go well. You don't want it to be sued. It's crazy. Right. So there are three things, I think, that have discouraged people from going public. One is the cost of regulation, like I said, scrape the barnacles off the hull of the boat. Second is what you're getting to, and maybe in some people's minds, the most important, and that is the litigation environment in this country. And so for the longest time, the Securities and Exchange Commission staff, it was never a formal policy of the commission adopted by the commissioners themselves. But the staff has been turning away would-be public companies if they had in their bylaws a provision that basically required mandatory arbitration, so no class action lawsuit or anything else for that as between fiduciary issues between shareholders and the company. And then secondly, the whole issue about fee shifting or like you mentioned, loser pays where if you sue the company and you lose and you pay, vice versa if the company goes after a shareholder, I guess. But it's usually shareholder to the company. Yeah, someone's harassing someone is wrong. So theoretically, if SpaceX goes public, they could now put this in their bylaws before going public if their shareholders approve it. So, what we're doing is – so, I made it explicit that the commission will not turn away and the staff will not turn away those sorts of would-be IPOs if they have a bylaw with either of those two provisions. And significantly, the state of Delaware over the last 10 years has made both of those out of bounds, illegal for public companies who are registered and franchised in the state of Delaware. Which is why you got all the dollar if you don't want to be harassed by little petty lawsuits from my point of view. Well, so in Texas, it's not quite clear whether those are allowed. So you've got to clarify it here more clearly. So I think there's some work to be done in some of the other states if they want to do that. Hey, guys, we're sending this clip to Governor Abbott and to Elon, and we're going to fix it for everyone. So that's up to the state of Texas to do that. Maybe a speaker here, too, then, and the lieutenant governor, huh? They have to do it, too. Is the legislature asked to do it? I assume. I'm not a Texas lawyer, so I can't really tell you. Okay. Well, that'd be my guess. But probably. I think they'd be a fan of it. The legislature would have to pass it. We'll get the clip. We'll fix it for you. All right. So anyway, but so I think that, you know, that's very important. And but again, going back to what we talked about earlier there, it's very important to allow states to to experiment and to, you know, that's why we have 50 states. And that's great. We're not one big company, a country. And so let's have the states compete and find what's best. I love it. It's up to shareholders. You don't have to invest in things that you don't don't don't agree with the frameworks. So, the whole theme of this right now for this area is also reviving IPOs, which is very exciting for us. You said there's a lot of depth, obviously, in private markets. There's a lot of reasons it's annoying to be public. I think it's dropped from, what, 7,800 in 2007 to about 4,700 or so public companies today? Yeah, about 40% dropped. So, is the goal to get that back up? We want more companies public? Does the public participate in more things is better? Is that an idea? I think so. So to have a good, robust public market is great for average people to be able to invest. And if we can help make disclosure issues fit for purpose so that investors can actually sit down and read an annual report and understand what's going on with a company. Like when I was young, my father used to go through the annual reports and proxy statements and things like that, watch them do that. and explain to me what was going on. So people just don't do that anymore, and especially now that these disclosures are so voluminous. And one example I like to give is the first section of the annual report, 10K, is called Item 1A Risk Factor. So I voted on that when I was a commissioner back in 2002 or 2003, whenever that was, And the commission adopted it, and the idea was that the first thing that investors should see is what keeps management up at night. And we thought it would be a page or two of bullet points to convey that to the shareholders. So, 20 years later now, 20-some years later, the risk factor section is the – on average, according to surveys, the largest number of pages of any section of 10K. You have to disclose every possible risk or you get in trouble. One of my favorites is, well, if the government increases corporate taxes, then your dividend may go down. If a meteorite from outer space smashes the window, we're going to have to have expensive repair. There are a lot. So, yes. And so it's gotten out of hand. And so here about six or eight years ago, the commission voted to say that if your risk factor section is more than 15 pages, you have to have an executive summary. So now you have an executive summary. Then you have the risk factors. And then you have the rest of the 10K into which all these risk factors are intertwined. And so you're repeating things at least three times in the whole disclosure document. It's a comedy of errors. Right. And so who's going to read this stuff and figure out what it means? And so that's why we have to – I mean, this does no one any good. I hear from individual investors and from professional investors, large funds and whatnot. Please, please, please get back to brass tacks. Get back to material disclosures because we cannot separate the wheat from the check. This is like something I've seen both at the UN and the Pentagon is they'll have a list of like 15 or 70 things that they're doing as opposed to five or six. And if you have too many things, it's nothing, right? You want to have a smaller number that actually matter that you talking about So I mean people need you know the SEC in the last few years started using in a bad way I think the term decision useful But I mean, people definitely need to have material information that is, you know, geared to what they need to know. And that will make it helpful for them to make a decision. And so, anyway, so that's the goal that I have. And so, what else can we do to make IPOs more appealing? Is there anything else on your list? One final thing. So, first is to right-size the amount of disclosure so we don't turn people off from investing. And if even professional investors are complaining about the amount and complexity of it, that's just not doing anyone any good. It costs a lot. It turns people off and it obfuscates what's important. Secondly, litigation. And then third, as I'd submit, is the corporate governance area. So this is not what people would normally kind of think about with public companies. But the one vital aspect that shareholders have to do is elect a board of directors to represent them and to help guide the company and management basically through the CEO reports to the board. And so that's a really important function. And every state that I know of requires an annual general shareholders meeting for the election of directors and retention of auditors and things like that. And so, unfortunately, over the years, and basically the SEC was the one that kind of instigated this back in 1942. And some would say it's, you know, contrary to some state laws and at least the ethos of the state governance laws that, you know, has allowed for, I call it the weaponization of shareholder proposals. So, shareholder proposal is something that the shareholder, a shareholder who owns a requisite amount or number of shares can put to all the rest of the shareholders to vote on. And so over the years, it's gotten to what are called by lawyers precatory proposals. And precatory means advisory. So it doesn't order the board to do something, but it says, well, you know, would you please consider producing a report on something? You know, why did you paint your building yellow instead of green or something like that? And it's not quite so frivolous. But anyway, but things like that that are advisory. So unfortunately, these have been weaponized to push particular views or issues by certain – I call them politicized shareholder activists. So they – yes, they own shares, but usually a very minimal number of things. Small amount that push their own agenda. There's nothing to do with the corporation usually. And they found out – so if this goes back to the one that really weaponized this to begin with, it was a community organizer named Saul Alinsky. back in the 1960s and 70s. And so he wrote a book in 1970, I believe, called Rules for Radicals. So the penultimate chapter is called Project Proxy. And so what he realized is that for the cost of a stamp and writing on a piece of paper a proposal that you want submitted to the shareholders and if he mails it into the company, that he found oftentimes that he could get the company to basically eat out his hands and come to him and say, oh, what can we do to get you to withdraw that proposal rather than our putting it before the shareholders? So basically that has led over the years to weaponization of this where it's become a big, almost a little sub-industry of particular, even individual shareholders who submit maybe dozens of proposals to various companies. What kind of proposals are the activists doing? Is there anything that comes to mind? Well, over the years, it's been things like, I mean, even some things that actually deal with governance. So like should shareholders have majority voting for directors versus just approving slate from the nominating committee? And some of that's not a big deal, right? Well, it's very important and everything has a consequence to it, intended or unintended. So anyway, but you have – those are kind of like – or should we have a staggered board or should all the board members be elected every year? Some of them are relatively reasonable, and then other ones are more – Right. So some of them are truly governance-oriented, but then some others are like, would you please – this was here over a few years ago. Would you please submit a report to the shareholders that will tell us what you are planning for the company if the average world temperature increases by two degrees centigrade by the year 2100? or something like that. And this goes back, you know, a decade ago. So you're trying to think into the future 80 years, you know, and most public companies that were here 80 years ago are no longer around. You know, maybe Standard Oil of New Jersey, Exxon, I'm not sure who else, but the General Electric, I mean, just a small handful. So anyway, so those, you know, it's It's very speculative to come up with that. So that's part of the environmental movement. But basically, that's an example of a precarious proposal that was submitted to management. And I think with the goal of trying to influence management through that to adhere to what the particular advocacy group was pushing. And this kind of activist stuff is tied into some of the other stuff the SEC was starting to work on before you were there, which is stuff around ESG and some of these other kind of stakeholder capitalism things, which a lot of us were really concerned about. It sounds really good. We're going to be helping all the stakeholders. If you don't understand how capitalism works, that's nice. We're helping stakeholders. But then if you actually look at how the proposals worked, it was actually going to completely change what future duty meant in a company, the ways companies even operate, the ways they can be efficient and succeed. Can you tell us anything that's shifted about how you guys are doing things with ESG or stakeholder capitalism in the last decade? Well, SEC was not really addressing this. And so through the proxy process, the shareholder proposal process, that was really being pushed by various groups and whatnot. And then you had – and then the proxy advisory firms were also supporting that and many times or oftentimes, I guess, advocating that these particular proposals be adopted by mutual funds and others to vote for that. Those proposals with respect to the public companies that the mutual funds were invested in. So that had profound effects across various public companies. And then NASDAQ adopted a rule that required kind of quotas for board members. That was funny. You had to have not only women but gay people, I think. I think they had various categories. I remember they had to ask Peter Thiel if he could be openly gay for the Facebook board because it was important to count for the number of people. And it's very silly stuff like this. So anyway, so yes, whatever. So that was no comment. But anyway, the privacy should be – There are a lot of jokes about who's going to take one for the team and come out in any way. I see. So whatever. So those sorts of rules, that's being changed. Yeah, the whole identity politics, the ESG politics thing was about activism and not about the things that matter in our business. I think it distracted and broke a lot of things, and it seems like that's on its way back down now. Well, everything goes in cycles, and so I think that's true. And I didn't mean to say NASDAQ had quotas. I don't believe those were a quota system. I think it was disclosure-based, but anyway. But it was focused on classifying board members according to – A lot of us were very frustrated that NASDAQ was doing anything at all along those lines, so it was definitely an issue. Yeah, it was a big issue. That's true. I'm curious. I hear national security is something that intersects with your guys' job a little bit. What are the frameworks about protecting our core national interests? Is that something the SEC thinks about at all? Oh, absolutely. So, the markets obviously are an important national asset and important to our economy in so many ways. And so, we need to be attuned to the threats to the markets. And so that's why stock exchanges and other market participants, banks and other traders, spend a lot of money to try to harden their IT processes and then also to prevent money laundering by illicit groups and that sort of thing. For example, and we deal a lot with China in a lot of different contexts, And one thing I've noticed about certain parts of Chinese culture is that a lot of the business people there think that if they could defraud you, that's your fault, that you were stupid enough to go along with it. And so what I see is you might have Chinese companies listing that are cheating and doing accounting inappropriately in order to trick American investors. So that's something to see. If that were to happen, you guys would have to look at that. Well, so we actually do. And you're right. I mean, different cultures have different attitudes towards things. But obviously, our culture is not allowed. Holds that abhorrent. Anyway, we want to try to make sure that does not happen. That's why our markets and our capitalist transparent system is so successful. Just to give a plug for approving economist Hernando de Soto, if you haven't read his book, Mystery of Capital, I think it's a vital one. It shows how the Western system of transparency with respect to capital markets and property is so important. And rule of law and sanctity of contract, enforceability of contract is really important. So, I'll give that plug. But anyway, so in order to protect our markets and our economy, we do have surveillance over the marketplace. And so here over the past few months, we've been very active to focus on companies. And it's really one particular type from what we've found with Chinese companies. They're operating in China or managed from China, but they are incorporated in a jurisdiction like the Cayman Islands. And then their primary listing is here in the United States and usually on NASDAQ They tend to be penny stocks And so we have found a number of them to have indicia of what we call a ramp and dump scheme where the price doesn go shooting up and then crashing down, which is a pump and dump. But this is more like a gradual, slow increase of value over time without any real identifiable explanation as to why it is going up in value. And so, it's being manipulated by offshore broker-dealers or whatever. And so, we have shut down so far about a dozen of them to protect American investors from getting into it. But the slow upward movement of the price, and then with no news, and then finally in chat rooms, we can pick up touting of this penny stock. And so one of them was something like it had maybe four employees or something like that, a very minimum number of employees. It was a shrimp farm. I'm just going way up. It had to do a bunch of reverse stock splits in order to keep the price above the minimum on NASDAQ of $0.10 per share. Anyway, that was one where we halted trading in that. Then it's up to the exchange, NASDAQ in this case, to delist it. Thank you for doing things like that. That's what the SEC should be doing, is stopping those people from defrauding our citizens, which is important. I have two more big questions for you. I want to make sure we hit here. One of them, I have to ask you about digital assets. President Trump said he wants to make America the crypto capital of the world. You've launched Project Crypto. What is this? What are we doing at the SEC with this? Well, we were talking earlier about regulation through enforcement and how that basically inhibited innovation in the digital asset area on the blockchain and that sort of thing, distributed letters of technology. So, we reversed course on that. We're now embracing it. And so even before I was sworn in as chairman, Commissioner Peirce launched what we call the Crypto Task Force. Now it's turned into Project Crypto because we're infusing it throughout the agency rather than just a small group of people trying to figure that area out. with the goal of changing our rulebook to accommodate this new technology and to allow our registration forms and things like that to allow people to easily comply with our rules and sort of accommodate it. But then also to make sure that we are providing for good disclosure and protection of investors and that sort of thing, which is obviously vital to it. But, you know, our goal is to help this grow. And as the president was saying, he wants to make America the crypto capital of the world. And we can do that by attracting these companies onshore. And the thing is, what may ever happen to cryptocurrencies, that's not for me to say or to have one view or another. In fact, I had to get rid of all of my crypto-related holdings when I took this job. Well, Bitcoin's been down a bit this year. You're okay. Well, at least when I was nominated. I know. But anyway, or it was confirmed. But anyway, but we have now an opportunity to make our financial system on-chain. So, to have buy through tokenized securities and other aspects, I think we can make it much more efficient. We can have almost instantaneous, depending on the type of instrument, but on-chain, delivery versus payment, payment versus delivery. And so, that is just a potentially tremendous advancement for the stability and to decrease the risk of this. And then it can apply to – tokenized securities can apply to lots of things. So, companies will know where their securities are, where their stock and other bonds and whatnot are. And there's a lot more transparency to that. And that's the other thing I want to ask here, because I'm a huge fan, obviously, overall of your work, of the crypto work that you and President Trump are doing. I think this is very important. What we did before was wrong under Gensler, in my view. But I want to understand, because we're making all this stuff for crypto, which is very risky. It's legal, and that's a choice we're making. It's a pro-liberty choice to let people decide to take that risk, because it is very risky sometimes, right? And people are like, you can lose all your money on something. And yet, it's interesting, because I build a lot of companies, and a lot of people get angry at me. And they say, Joe, you're building these companies. I'm not allowed to invest in them. I'm not, SEC won't let me give you any money. Like, well, I love to let you put some money in, but the rules do make it very, very hard for me to take your money. So yes, you can buy like bathroom coin 17 or whatever, but you're not allowed to buy this real serious thing I'm doing. And it seems like there's something a little bit inconsistent there. Like, shouldn't we be letting the middle class participate in fair ways and other things we're doing more easily? And how do you think about that? Well, so that is a big issue. And so up till now, I mean, it's been very – I'd say not clear whether somebody could go out and buy bathroom coin, XYZ or something like that. We should make the rules clear about it. So right. And that's what we're doing. We're trying to make clear. That's our goal is to come out with rules that differentiate between what's the stock security and what is a commodity where the CFTC, the Commodity Futures Trading Commission, can oversee. So meme coins and all that and stable coins, those are not, for the most part, securities. And so we're going to make that clear. Which is hilarious because there's no asset backing it. Therefore, you can do it. But that's the rule. Yeah. Well, but I mean, so security has a meaning in law. Of course. So anyway, so we can talk about that maybe on another day. It gets very legal very quickly. And our viewers might snooze away if we do that. Well, Congress made the laws and you're enforcing the laws. Awesome. Exactly. So, anyway, going back to what may or may not retail mom and pop investor invest in. And so, this is called the rules around accredited investors. And so, there is class of securities that are not for public acquisition, but they're private securities. And so, therefore, in order to keep them from being public securities or having to register, you have to have fewer than 35 offers, not even sales, to non-accredited investors. But for accredited investors, you can – sky's the limit generally. So, anyway, so what does investment – what accredited investor mean? And so that's changed over the years, but basically it's geared towards your income and then your net worth, like excluding your house now and things like that. So a lot of people are not able to do it. They can go down – I mean, to your example, they can go down and buy a lottery ticket and lose all their money, but they are not allowed into some of these other types of markets. So, we are undertaking, and there's an executive order the president signed asking the Department of Labor and us to look at these various rules and to try to see what makes sense for normal people to be able to invest in. So, we are tackling that. And so, I think that it can and should be done. And retail investors are already exposed to these sorts of investments through pension funds, through their insurance companies, and things like that. So, can we devise a system with guardrails? You can't go and plunk all your assets into one thing and then lose it all. So, we can help to guard against that. But can we – this gets away from your libertarian aspect. You have to protect people while letting them do it. Right. So we can go step by step, see how it goes. If we're going to do crypto, we should do that too. I think it's fair. Exactly. And so we're not going to throw the gates open to any of this and have everybody come rushing in. Or even worse, have all the Sharpies on Wall Street sell a bunch of stuff to unsuspecting people who can't discern what's good or bad or whatever or what's some of the intricacies of it. But there are a lot of issues around fees, around liquidity, around valuation, around where investors stand in the capital stack. Like, are you at the very bottom if the thing goes bust? Are you at the top? Are there side letters between some big investors or not? Is this fund that you want to invest in? Is it a continuation fund that never really has a closing time? And so then it's difficult to see the valuation. So all of these issues we'll be confronting and come up with things and guidance for these intermediaries, the trustees of funds and other types of investment vehicles for savings and retirement to be able to hang their hat on and then to offer these products for some of these retirement funds. I love it. Well, Mr. Chairman, I love your principles and your boldness and your fairness with how you're approaching everything. The one last question we always ask everyone who comes on this show, we created American Optimist to push back on some of the nihilism and cynicism we see about our country. What makes you optimistic on the future of America with everything you're seeing right now? Well, I think the sky's the limit for the United States. I mean, when I go around to other countries, Japan, to England, France, Germany, and through Europe, everyone looks at our economy and our capital markets with admiration and, frankly, envy. I mean, they wish that they could have the type of investment culture and risk-taking culture that we have here. So, you and other entrepreneurs who are willing to take a risk and jump off the cliff, and who knows if there's a net down there below, and you could lose your shirt or not. But that kind of risk culture is inherent in the United States, and we're about to celebrate the 250th anniversary of the Declaration of Independence next year. And so, I think that's exciting. I think all of the innovation that is coming about in the financial markets, in particular in my world, but in your world, elsewhere, in other parts of the industry, I think are just very exciting. And I think we just have untold chapters to be written. I'm very confident about the future. Well, thanks for being here at UATX. Thanks for being on the show today. Thanks for having me, Jay. See you soon.