主持人: All right, everybody. Welcome to the All-In Interview program. Today, we are delighted to have two of the most important individuals shaping capital markets over the next couple of years. SEC Chair Paul Atkins is with us as well as CFTC Chair Michael Celig. Welcome to the All-In Interview Show, gentlemen.

Paul Atkins: Glad to be here.

Michael Celig: Thank you very much. Great to be here.

主持人: Yeah. Also with me my bestie Shamath Polyhapatia who is known to participate in capital markets. I think there's a great structure here for us to talk many opportunities and then guard rails and things that we should be concerned about in such a dynamic time. Chairman Atkins, this is your third tour of duty since the '9s. Things have changed dramatically. So maybe just to start us off here and I know Chimat's got a lot of great questions ready to go. I'm just curious in your time, let's say, the last 40 years or so, what has uh what have you noted here about capital markets and how they've changed and what's important for us looking forward?

Paul Atkins: Well, thanks. It's great to be here and see both of you all uh today. Well, so I started out as a young lawyer uh in New York City doing uh corporation finance work, you know, new offerings and that sort of thing in the mid80s and uh and it's and there you know to to be a startup company and to to build your products and do R&D and all that uh you had to go public uh in order to to so Apple and Microsoft Advanced Micro Devices all of those companies started off as um as uh you know IPOs uh and so Andreessen Horowitz has a really I think a really good uh bar chart where they compare the companies of the uh early and mid to late 80s to uh today where I mean it just basically demonstrates through the ROI that uh insiders versus the buyers of uh the public stock uh you know enjoyed from those early companies. The insiders meaning, you know, there's not much private equity or venture capital back then, but the insiders meaning the officers, directors, and whatnot, they had a relatively thin slice of the entire pie. I mean, everyone made out well obviously, but the public uh purchasers of in the IPO, you know, made out very well over the years and and had the lion share of that. You look at today the current uh situation where you know we have robust private capital markets and uh we have fully today half the number of public companies as we had 30 years ago and it's completely reversed. The return on investment is um you know mainly to the insiders, private equity, venture capital and the corporate officers and employees versus the the public because they're they're mature companies when they actually go public. So that's a huge change. the private markets are, you know, very robust and and strong, but uh but uh anyway, but the American capital markets are are very healthy. I think

主持人: when you look at that back then, there was a real requirement for everybody to do an enormous amount of work because to your point, these companies were quite young. You'd be a four or 5year-old company and you'd go public because the going public was not about monetizing anything. It was actually a fundraising moment. it was like a series C or or a series D. I guess the answer is the reason it changed was probably because to your point there's all these returns and so investors said well let's go capture these in the private markets for us and our LPs but what it also does is then change the nature of how these markets behave. Can you just comment on the amount of time companies are staying private, the dir of the IPO because it has become a liquidity defining moment and is much more so than the financing moment and whether things should change and if so how do you want to change that and why? Yeah. Well, it's a free market obviously, so you know, investors, we should allow the market to develop as it will, but uh you're exactly right. So now it's more of a liquidity event um for insiders and um

Paul Atkins: and and so what we are seeing now is uh in the private markets, you know, there's a lot of capital that's uh where people are willing to deploy it uh to companies at early stages and then to to stay on. But at the same time there is there are inhibitions for uh for private companies to go public and one of them is the the um the uh cost of our rules to comply with our rules and the disclosure ones especially where we have all the annual report requirements proxy statements and all of that and so uh and then quarterly reporting and and so forth. So that is one big inhibition where things are not necessarily focused on materiality anymore.

主持人: Are you allowed to convene a group of people and start to line item these rules out or change them or does it have to go through some much more robust process where there's a lot of competing reasons why some people some lobbies maybe may want these rules?

Paul Atkins: Oh, sure. I mean, they're vested interests in everything, but that is part of my program uh for this year and going into next is to go through our rule rule book. We need a spring cleaning. We need cleaning out the attic, the basement, and the garage and to really look at things unlike the agency has ever done before with a real focus on materiality. So, that's one. The second to make IPOs great again is to focus on litigation and uh and so that is another thing that is a key uh inhibition I think for people to go from the private markets to public the threats of uh class action lawsuits and vexacious uh litigation with every dip in the um in the stocks. You have uh issues like mandatory arbitration, fee shifting, you know, loser pays, that sort of thing. Both of which Delaware has recently um outlawed for public companies. But there are other states out there. And then the third is the weaponization of corporate governance around shareholder proposals, that sort of thing. So it becomes a pain to deal with the annual general shareholder meeting and that sort of thing. So those three are maybe not the only inhibitions, but there are three key ones that I've heard over and over and over again over the last 30ome years from venture capitalists, private equity folks, investment bankers, lawyers, and etc. So,

主持人: Mike, what are your top priorities for 2026 in the CFTC?

Michael Celig: Well, like Paul, I started off uh working in private practice at a law firm. And right around 2021, 2022, every week my clients would get a subpoena from Gary Gensler or from the CFTC uh and were faced with this onslaught of regulation by enforcement. They were faced with regulations that did not work for their business models. And these were crypto firms, prediction markets, artificial intelligence firms, as well as our traditional financial market participants. They were just relentlessly attacked by the the federal government under the prior administration. So I really came into government to help write the ship to help make sure that we have purpose fit rules and regulations for new innovative technologies and financial products. And so a big piece of my agenda has been crypto uh our crypto asset markets as as you all I'm sure are tracking. There's some legislation that we're really hopefully uh working with David Sacks to get across the finish line and the president. Um but but that's going to be a key piece. So the CFTC would uh have a broad amount of authority over the spot markets and we're getting ready to to implement those rules should the legislation get across the finish line. Another key piece of our agenda has also been modernizing and upgrading our rules and regulations for onchain software systems, blockchain networks, and other types of digital asset products regardless of legislation. It's really important that we have futureproof rules and regulations that are ready for the innovations of both today and tomorrow. And that's blockchain, but that's also artificial intelligence and and other uh areas of technology innovations. So there's a lot of things we need to change uh within our regulatory framework to make sure that we're ready to accommodate that.

主持人: Let me ask both of you guys a question. So this sits at the intersection of tokenization, crypto and what I would call systemic risk. So if all if everything becomes tokenized and digitized and 24 by7, what do you think needs to happen to make sure that the systemic risks to the system are managed? And here's what I mean. If you go on X, I've gone down the automated trading rabbit hole. So, I don't know if you guys know, but there are these incredible young vibrant projects that are basically replacing a Citadel, replacing a Millennium, and they're building these automated agent-based hedge funds that are transacting across all kinds of markets all the time. And on the one hand, I'm completely attracted to it. I think it's totally democratic. It's the free market. It's like let's figure out what's going on there. And on the other hand, I ask myself the question, where's the kill switch or where's the circuit breaker, if you will. And I just want to give you both a chance to talk about how you see these markets converge and both the positives and the negatives of it.

Michael Celig: Absolutely. we need to be considering these risks as we're developing rules and and this to me is is the whole reason we need to have a purposefitit regulatory framework for these products and and autonomous agents and all of that. Uh up until now I think the approach has always been let's apply the old rules and regulations and and that's going to work out and make sure that uh nobody can actually innovate and create something new. So we are embracing these opportunities in the markets. we need to study them and make sure that we understand the risks. Uh but we can develop rules that accommodate that. So having a regime in place that says go build don't ask us for permission but we need to study that work with the market participants understand the risks and on our end we need to set up guard rails. So I do think there are unique uh risks when you have the ability for an agent to go out and deploy capital on on basically an autonomous basis. uh and and that's going to be something that our markets we've really really never seen before as regulators. But that doesn't mean we have to stand in the way and block it. I I think we need to really understand the risks, make sure that we have the right guard rails, whether that is us operating nodes on blockchains or or really having technologists that are studying the contracts and the code. Uh but I don't think there's any reason we can't have these technologies built here in America.

主持人: So let's build on Chimath's conversation here and his points. One of the key uh dangers and innovations opportunities in the market is leverage and we see it obviously hedge funds have been doing this for a long time. We're starting to see it in prediction markets, Mike, and we're seeing it in crypto. What is the proper amount of leverage and who should set those rules? Obviously, you have Congress making laws. You're responsible for executing them, chairman, in order to make sure the markets are orderly uh and that you protect investors. So just walk us through what you think is the proper amount of leverage and your framework and and you've been at this for a while as we mentioned. How has that changed over time? Educate us a bit on how we got to a world in which Bitcoin investors might be 100x or 50x and people might be leveraging their prediction market and seems like it has a function but it also seems like almost every story starts and ends with leverage.

Paul Atkins: Right. Well, so I think it depends on the marketplace and and on the type because obviously you have banks and they're all about fractional uh deposits and and all of that and and lending. Um so uh you know so we we've gone through that back in 2008 and 2009 and the financial crisis and going all the way back to 1929 and then even in the 1800s obviously all the repeated problems with um you know financial disruption and financial markets. So we have to be careful about that. There are all sorts of rules for broker dealers, for banks, for in the futures markets for margin and all of that to um like put a lid on some of this and to have some controls around it and and transparency, you know, in the futures markets the the uh the the exchanges have a lot of power, you know, over their members and over margin and, you know, closing things down. We saw that even in the COVID time and and whatnot when the markets got hairy there. So um you know those things are constantly looked at. The Fed plays a role as well um you know with margining and the securities market. So all that uh has to be adjusted and now we need to look carefully at these new markets and then see what's analogous and see what authority we have and uh and then make sure that you know we're not killing uh trading. But we also have to keep an eye out for the future to make sure that we're not allowing things to then blow up in our face.

主持人: Here's a question that may sound dumb, so I apologize if it does, and this is to both of you. I think a lot of people don't understand, or at least I don't, where the SEC and the CFDC cooperate most effectively, but then as with all things, where does coordination maybe break down? Could you just explain that to people so that we understand and level set about what the expectations of each organization are and how you guys actually work together day-to-day when you have to?

Paul Atkins: Having been around the two agencies now for 30ome years um I can really say that unfortunately the two um and not necessarily at the commissioner level but uh certainly at the staff there was a lot of sniping uh you know back and forth. So, I compare it to two uh fortresses with no man's land in between. And so, the no man's land is littered with the bodies of wouldbe products that people were unsure like is it CFTC, is it SEC? And the crossfire between the two just killed the products. They never went to market. Single stock futures, portfolio margining, which has so much uh potential benefits for um making the financial market safer and more efficient. But Mike and I are setting out to change that and I'll let you uh go forth on that one, Mike.

Michael Celig: Absolutely. The the two agencies have unfortunately rarely worked well together and what we're really uh moving uh forward in a new direction with our harmonization efforts. We have a memorandum of understanding that the two agencies are working on hammering out and getting in place that will allow us to share information, coordinate on specific issues, and make sure that we don't have this turf battle between the two agencies going forward. And part of that starts, of course, at the top. Chairman Hackkins and I work very closely together to make sure that we're coordinated on policy, but also at the staff level. So when exchanges and brokers and market participants are coming in to register or to offer new product, we need to make sure that there's not this fighting over where they're supposed to be registered and what they're able to offer. Some of these products across jurisdictions. A great example are some of the prediction markets products. Some of them involve public companies and securities and others are related to things like sports and politics and that crosses jurisdictions. So we need to make sure that we have clear lines and that our market participants aren't subject to duplicative regulatory frameworks. and Chairman Atkins and I have talked about substituted compliance regimes where you have a primary regulator at the SEC or the CFTC, but we work together to figure out the cross jurisdictional products so that you don't get stuck with duplicative regulation registration. Another area is crypto where we've got blockchain networks, we've got smart contracts, we've got protocols that have both securities and non-securities trading on them crossjurisdictionally and and we need to make sure that the standards are consistent because it won't work if we've got one blockchain for securities and another blockchain for commodities and nothing in between. So I think this is really critical that the agencies bury the hatchet and move forward with a harmonized and coordinated approach

Paul Atkins: as we look towards the future. I mean to build on yeah there are two separate regimes and and there are differences in approaches uh based on the statutes that govern us but uh we also and speaking for the SEC we have a lot of uh uh flexibility with respect to exemptive authority and whatnot. So my dream is one day that and I hope we can achieve that here in the next couple years to have like a super approach where you know there is okay blurred lines between the two but we've coordinated our approach we've coordinated uh you know to reduce the friction between dually registered companies and and to make everything work very efficiently.

主持人: I want to ask a question around prediction markets. Let me try to set this up the way that I think about it. So I think that there is this inexurable tension that's always existed and will always exist between the investor protection that has to happen when you have publicly traded securities or commodities or derivatives but then the capital formation process that on behalf of the company or whatever that wants to get access to this and there's always been this kind of back and forth tension. The best example of this is REGG FD where we said at some point, hey, let's hold the trains. If one person knows something, every person needs to know that thing. Makes a ton of sense. When you get into prediction markets, I think that this is going to stress test this assumption to the nth degree. And the reason is that there are just certain things that some people know, and we see it now. Every other day there's an article about some prediction market that turned out to be right or a bunch of other markets that were almost manipulated. It seems like it's ripe for this question to come up all over again. The correlary to this is Brian Armstrong tweeted something which I thought was quite an interesting comment about prediction markets which is that certain prediction markets only thrive on insider information which is to say that they know a secret and so that's how the market can exist and actually conform to an outcome and that creates these two sides. I just want to get your thoughts on prediction markets. What role do they play? How do we balance the capital formation that the market creates versus the investor protection, the insider trading that may be happening? It's a very complicated space. I'm not going to hold you to any of it. I just want to think out loud.

Michael Celig: Well, these markets aren't new. We've had them since the '9s. They started off with the electronic market in Iowa where folks were predicting the political outcomes on elections. We've been surveilling and monitoring and and policing fraud and manipulation in these markets for a very long time. And to the extent that there are contracts in certain markets, for example, what color Gatorade's going to be, you know, dunked on the the coach at the Super Bowl, some of this stuff is potentially at risk of being manipulated. And there's a risk that somebody on the team is able to go trade because they have special information about the Gatorade they put in the cooler. We have standards to make sure that those contracts should not be listed and and it's on the exchanges as the first line of defense as self-regulatory organizations to evaluate each contract and certify to us the regulator the CFTC that those contracts are not readily susceptible to insider trading manipulation fraud and the like. And we saw actually recently uh Kalshi one of the the prediction markets brought two enforcement actions against participants. One involved a contract uh related to Mr. Beast's YouTube channel where one of his employees insider traded based on information of when a video was going to launch or what was in the video and the same sort of authority that you have at the SEC around a duty of of uh you know care to your uh employer is prevalent in our markets. So to the extent somebody insider trades on information, we police that and and it's really important for folks to know it's it's not just securities insider trading, we've got it in the commodities world as well. And the exchanges are policing that, we're policing that. And to the extent folks are listing contracts that are susceptible to manipulation, there's consequences to that. We can reject those contracts or we can police fraud on the back end. But there is a cop on the beat there. And I I do want to caution that insider trading is is uh is not something that's necessarily allowed in our markets, but we do believe that markets are truth machines that they do create a really powerful source of information. We've seen the hoaxes, the fake news, and the manipulation of the polls. The prior administration tried to ban these markets ahead of the 2024 election, and they really increased turnout. It showed that they were correct when a bunch of the fake polls were put out right ahead of the election. So, we really have to foster these markets here in the United States and make sure that they don't uh flourish in Russia or somewhere else where they really will turn out to be a source of disinformation. So, we do believe it's valuable to have that uh trading and information flowing through the markets, but insider trading is is still uh still illegal here in the US.

主持人: Take us through some examples there, Mike. Like it's very obvious and clear to people who work at Microsoft. If some new version of software is coming out or the sales are dynamic and the numbers haven't been released, obviously you can't trade on that. You're going to jail. It's insider trading. If I am a reseller of Microsoft software or a friend of mine works at Microsoft and says, "Hey, things are going great with this new product we have." And I make a thoughtful, you know, uh, wager on a prediction market. or if I intentionally do something like I'm a streaker at the Super Bowl was one that came up recently and I actually am the streaker. Not that I'm planning any of this to make the bet.

主持人: Where are those rules? Where do they live? And who's responsible? Is it the prediction market? Is it you? Or is it TBD? Because it does seem that there's a bit of gray area as Chimath was sort of alluding to here. And and does this need to be codified and does need to be a bit more education for the public on it?

Michael Celig: A lot of the gray started off with the prior administration really trying to ban these markets and not facilitating proper rulemaking and guidance in the markets. Over the past year, you know, I've been in the the office for a couple months now. For the past year, under the acting chairman's leadership, a lot of these products have really exploded in popularity. And so now is the time to put out guidance and make sure that we're not regulating by enforcement as the prior administration did. But we are setting standards. We are making clear what our statute says and that is that these contracts cannot be listed if they're susceptible to manipulation and we take that very seriously.

主持人: Standard.

Michael Celig: Yeah. Yeah. So the exchanges are responsible for policing that and reviewing the contracts and they certify to us the regulator that they are free of the risk of manipulation and if there's manipulation the markets we're policing that the exchanges are policing that. So there are controls in place, but a lot of these questions as to what's susceptible to manipulation are are up for debate. And I think there's some risk. There's uh possibility, you know, your example with the streaker if somebody can just jump out of the stands and go streak across and and uh collect on the contract. I mean, that's something that does seem potentially at risk of manipulation and and fraud. And so we need to be careful about that. The exchanges need to be on the lookout for that. And if they're not, you know, there's consequences with us as a regulator.

主持人: The markets should take the first step and make sure they're thoughtful about which ones to fire up to begin with. And we have seen that they are not saying, "Hey, this dictator is uh executed." They're saying, "This dictator is deposed or is no longer in power." That seems to be a very uh tricky one as well. Yes, Mike.

Michael Celig: Well, there's got to be integrity in the contracts. Our rules require that the contracts have, for example, certain fungeability and standardization. They're derivatives contracts. This isn't simply just betting at a, you know, with a bookie in a casino. And so each contract, that's that's correct. You would look for is it tied to an election or is it tied to a very specific event? Uh, is there a risk that that event can be manipulated or insider traded? And the and the exchanges are evaluating that. And there are instances where something is insider traded and it wasn't something they could have foreseen. it wasn't readily susceptible to manipulation and so they police that they bring uh actions against the traders and Kalshi did just this with some of its fines and in the past few weeks.

主持人: Let me ask a question about quarterly reporting because maybe where there was the most manipulation in the past was around that, right? People would try to frontr run these quarterly reports. They would try to make guesses. Invariably, you would find some people that crossed the bright red line. But recently, Paul, President Trump said, "Maybe we should move to six month reporting or one-year reporting." And it was really wellreceived by a lot of people. Do you think that quarterly reporting has sort of also killed the IPO? Meaning when we think about making an IPO great again, just the complexity and the burden of such short termism, has it made the markets better or worse, do you think?

Paul Atkins: Yeah. Well, that's a great point and I just wanted to add one uh kind of a little uh note to the previous discussion there that you know if if something is a tokenized security you know the uh federal securities laws apply and so that goes for insider trading you know with respect to uh trading securities uh where wherever they may be you know on the online or or on an exchange floor or wherever. So any but then to your point about uh the cadence of uh reporting I think that's an important one and we are going to come out with a a proposed rule and and seek comment on it and I frankly am a bit agnostic myself personally because if you look at things uh we haven't always had quarterly reporting. In fact, when the SEC was uh you know formed back in 1934, it basically codified the New York Stock Exchange rule book, which at the time called for annual reports. So annual reports prevailed until 1955 and the SEC went to semiannual reporting. And by the way, the UK did the same thing around the same time. And then in 1970 only did things go to quarterly. And then the UK parted way they did quarterly as well. But then in 2014 or so, they uh they changed to go back to semiannual, but if you wanted to still report quarterly, you know, God bless you and go ahead and and do that. So, we're still at quarterly and and so the president did send out a you know, electronic message about that. And so, uh but our staff was looking at we're looking at what we call filer status. There are all sorts of different categories of filers with different rules like large accelerated filers, accelerated filers, emerging growth companies, and so forth. So, we're looking to kind of simplify all of this. And part of that also is perhaps smaller companies uh could benefit from, you know, reduced uh you know, uh cadence of reporting, but maybe not. They they have trouble finding analysts to follow their stock. That's another thing that might be an inhibition to go um public for small companies and maybe analysts want quarterly. Maybe they don't. Maybe they would prefer semiannual too. So I think this is a great debate to have right now. And you did have Barry Diller even taking the other side of it where he's like I'm just tired of giving predictions. I'm tired of playing this gamesmanship quarterly. I'm just going to release our accounting numbers every month and you all can have fun with numbers as much as you like.

主持人: But that's amazing because you can do that now, right? You can have software that's so vibrant that it can just Jason release a stream and there'll be people that have, you know, developed agents and developed these AIs that will just process all of that and they will then publish out a dashboard and the whole thing will be almost real time. It could be real time.

Paul Atkins: Yeah. And and there are services that do semi-interesting things already that you can buy that maybe people with budgets for data streams can do.

主持人: Let's talk a little bit, Chairman Atkins, about the history of accreditation in this country. I think when you brought up Microsoft and the early part of your career, watching these companies go public, I did a little research while we were here and you were speaking. Microsoft and Apple went out with 1,200 employees each and about $400 million in revenue in today's dollars. 120 million in those dollars. So obviously there was this incredible opportunity for you to create and place a bet on these companies as an individual with a stock trading account and maybe move from you know one tier in societal wealth to another. And that's a big part of the American dream. But as we talk about private markets the SEC has ancient rules now going on close to a century old to protect investors called accreditation laws. They apply to 95% of the of the country apparently and about 5% of us get to trade in some way in private companies where the value is created. The SEC has been challenged and charged with changing these evolving these and it never seems to happen. My perception is which SEC chair is ever going to take this on because hey, it's just easier to keep the status quo. But is there not an argument and I know there's some legislation now to create a sophisticated investor test. So instead of you inherited a million dollars, you're qualified to buy stock in Uber when it's a private company, why not a sophisticated Tesla, a driver's license, and you learn uh how to trade in private companies, and you get to participate in that market instead of just saying to people, well, you can only participate in sports betting or blackjack in Vegas, but you can't. If you were an Uber driver or an Airbnb host or an HR person using LinkedIn as a private company, buy those stocks. Well, you have an insight and you have an instinct into maybe purchasing. So, so talk about the accreditation test and sophisticated investor tests and and your personal view on it.

Paul Atkins: Yeah. Well, great point. And so, well, here's one chairman who is going to tackle that issue. And so, we intend to do that, the accredited investor definition. And so interestingly, I mean to your point in the statute uh in the investment advisors act of 1940 I believe or investment companies act of 1940 um it there's a definition of that and it includes knowledge not just uh you know wherewithal or sort of assets that you have but include it has the word knowledge in it. So to your point, why can't we have and people have suggested this over time uh equivalent of a driver's test or something like that or recognize somebody who has a CPA or you know a CFA or or whatever but uh you know maybe a type of Series 7 but uh you know not so complicated as that that FINRA um administers. So part of the thing is like who's going to make the test, who's going to administer it, and how do you um get there? But anyway, but we can those are issues that we want to tackle. Um, and I remember uh when this uh uh issue came up when I was a commissioner back in the as uh there was one uh comment letter that came in that really struck me and it said, "Today I am able to um this is the comment letter uh commenter speaking. Today I um am able to buy a hedge fund, a private uh asset or whatnot. um but tomorrow once you raise the standard of you know I have to have x amount of money of assets or income or whatever I won't be able to. So what's changed? Why why are you going to take that away from me? So, why does a finance professor who makes $100,000 and lives in an apartment and doesn't have any other assets, why is he not able to your point to invest in uh some of these uh types of securities, whereas an aerys who just came into $10 million or something like that suddenly is. Now, she can hire people to advise her, but they could be dummies, too. I mean who knows what they are but so anyway so I think we have to take a fresh look at all this and we are going to do that uh here this year and uh um with a with a proposed rule to address that.

主持人: I have a question around the derivatives markets. Well actually before I ask the question about I want to ask about the futures markets which is you have an enormous number of highfrequency trading firms that really dominate futures volume. Can you just tell us both the value that these folks are providing? Is it truly liquidity or is it and there's been some speculation about this very sophisticated market ARB? And if it's the latter, where do you think we need to do necessarily a better job? I think the best example is if you look at just the volume of futures activities and spot prices of certain commodities, the basis is starting to kind of get out of whack. So just Tell me about the market participants part of these derivatives and futures markets and what you think about what's going on.

Michael Celig: Our markets have three core types of participants. We've got the hedggers, we've got uh speculators, and we've got market makers. And the liquidity is really the the result of all three. So, there's going to be market participants that really rely on whether it's a cattle contract or a credit default swap product. they need to to enter into these agreements to hedge key risks in their business. And then you've got folks that are willing to provide liquidity, whether they're speculating and taking another position on that for for their proprietary basis or they're doing so to make markets and earn a spread. And that's right. I mean, we're regulating these markets. We're making sure that the trades that are going through have integrity and that folks aren't uh, you know, wash trading and trying to manipulate markets. There are some strategies that raise particular risk of manipulation or fraud and we police that. We've taken actions in the past to to make sure that uh the the exchanges are not uh subject to uh illicit behavior and and and trading. And the exchanges similar to my point earlier related to prediction markets are first line of defense here as well. They surveil their markets and we're in constant communication with them as well as the traders. were often times sending information requests to traders about their activity. So I I do believe that the these all three participants are very important to make sure that our markets are are liquid.

主持人: So on that last point that you just made which I think is a very good one post GFC there was like these central clearing functions right to make sure that derivatives contracts were getting not getting out of control and we had a good sense of systemic risk. But it turns out that one blind spot everybody has is to these bilateral swaps. I mean, I've done certain bilateral swaps with certain counterparties. It's not clear to me that you know that on the back end of it. Can you talk about that and how you think that that should stay the same, change, what that is, whether that keeps you up at night, whether it should keep us up at night.

Michael Celig: Sure. Well, I'm not a huge fan of DoddFrank, but in the wake of DoddFrank, we got swap data reporting. And these bilateral over-the-counter swaps are now generally all there are some exceptions but sent to swap data repositories where we're getting information on a daily basis as well as these third party swap data repositories that compile that information. So the markets are much less opaque. We have transparency today. But my concern about the swap data reporting regulations is that they have really been a tool for our enforcement divisions in the past where you've got so many different fields. It's really difficult to characterize each different type of swap. I'll tell you when I was in private practice and uh folks started entering into Bitcoin swaps and and crypto swaps characterizing that as a type of uh derivative relative to cattle and wheat and other commodities really was a whole lot of legal advising and a lot of wasted money frankly. So we need to simplify. We need to make sure that our swap data reporting regime is rational and coherent and makes sense for the everyday participant in the market. you shouldn't have to go hire a high price law firm just to enter into a risk management tool. But these markets, the these uh these developments post DoddFrank, some of them make sense, some of them don't. A big priority of mine is going through uh rule by rule to make sure that all of our regulations are really the minimum effective dose.

主持人: I have a question for both of you. Is there something that if you could borrow from the other person's regulatory toolbox?

Paul Atkins: H

主持人: something that they can do that you cannot that you would love to also be able to do.

Paul Atkins: From my perspective, one thing for new products that the CFTC has is called self-certification. So for um repetitive products that uh you know once you go ahead and approve the general type of uh uh framework for it uh then it's self-certification by the markets uh and by the people who are of course coming forward with the products. We don't necessarily have that kind of uh thing. We do for some things like for ETFs and whatnot where we've come up with rules that then uh you know then it's up to the market participants to abide by the rules and have their product conform. But on so many other products we have a a much more complex uh you know labor inensive let's just say approach uh to it that requires approval by the staff and the commission and and that sort of thing whereas it's much more streamlined on the CFTC side.

Michael Celig: Well, on our side, there's uh there's one regulation that I think's been really effective on the SEC's uh jurisdiction, and that's the alternative trading system. So, on both sides of the house, we have fullborn uh you know, very very intensive exchange registrations. Uh the SEC went ahead with a rulemaking that allows broker dealers to then set up a an alternative trading system and it's really an exchange light framework and I'd love to see that on the CFTC side as well.

主持人: Chairman Atkins, I want to talk about fund formation and the the power of venture capital in the US economy. 20% of the GDP of this country comes from ventureback companies. 40% of the S&P obviously with the Max 7 contributing heavily uh comes from ventureback companies that we all know and love their products. But fund formation for venture capital is ancient and there are massive limitations on it. There's two ways obviously to address this. One is the path to accreditation for people to become sophisticated. We just spoke about that. But the other is how many people are allowed to participate in a fund. As but one example, when I raised my last fund, I had well over $und00 million in accredited investors who wanted to have a small bite of the apple and get into venture capital. But I can only accept a hundred. I can only accept 10 million. And doesn't make any logical sense because in fact it would be better if more people could put in smaller amounts. Many hands makes for light work. and more people could participate in this. This would have a dual impact on the economy. One, more startups would get funded and two, more individual investors would get to participate in this very closed ecosystem known as venture capital. So, I was wondering your thoughts on venture capital specifically and formation of what is the driver of the US economy.

Paul Atkins: you raised a great point, but a lot of that that you're talking about with funds is statutoily uh mandated. And so there are two big exemptions in the uh investor company act of 1940 uh that are, you know, pertinent here. And so those were adopted by Congress with a lot of uh debate and and whatnot. Um and so um so that is more difficult to change and there's certain ways that we can change them and so we are going to look at this and there you have a lot of different uh types of accredited investors you have qualified purchasers you have you know also qualified institutional purchasers and and and whatnot or buyers rather and so uh so all of these things need to be uh you know I think looked at a new and where we have the authority through um our exemptive power uh under the various statutes, we'll be able to use that. But I do think that especially now as we talk about um opening up private uh funds or or private types of products to a broader range of people, including to uh you know, 401k plans and whatnot. We're we're working with the Department of Labor and the Treasury Department uh to address this and we all feel very strongly that here you have to have good guard rails. You just can't open up the barn door wide open. That we have to have standards for what can go into these sorts of uh you know plans, 401k plans, pension plans, but retail investors are already exposed to the private markets through their pension funds, insurance companies and all that. So all of this needs to have a you know fresh look and you know come up with uh good uh new ideas uh to basically provide de democratize it.

主持人: And just as a quick followup there one that I think would be super easy is just hey 10% of whatever your last two years average

Paul Atkins: income was or you know no more than five

主持人: or 10% of your net worth Michael there there are some common sense ideas here that would would increase the amount of participation. Can you think of Michael any reason that we should restrict Americans from being able to participate in venture capital? Is there any argument here if there were some basic level controls as I've outlined here? Sophistication taking a test or a cap. You can only put 5K in. You make 150K a year, you can put in 15K per year. What are your thoughts, Michael?

Michael Celig: I'm a believer in free markets and I really think that allowing more access to our capital markets is is really a powerful thing for everyday Americans. We saw the ICOs, you know, the initial coin offerings where things just kind of moved into crypto and you had all sorts of investments in different projects and they were attempting to to get under the radar of the securities laws even though there are capital raises with with different tokens and I think the markets always find a way. So allowing for more access, decreasing some of the requirements around accreditation, I think that's a really great thing for the American people and and really will just allow for people to to have some skin in the game and maybe they lose sometimes, but other times they really hit it big and it's a great thing for for everyone.

主持人: So nature finds a way, right? Like they don't allow people to participate. They start doing ICOs. And when I looked at them, I looked at a hundred Shimoth I said, "Wow, 99% of these are white papers with spelling errors in them. These are not the real companies that you and I look at in our daily lives in venture capital. So it's reminds me of what happened with crypto which is hey it went offshore. It went to another stream.

主持人: I want to talk about just the capital markets globally. We're in this very unique moment where there just seems to be this separation where the American capital markets and you two are tips of the spear have enormous credibility. And then when you look at some of these other capital markets Paul you mentioned the UK but I hate to say it so bluntly but the UK is a disaster. It is impossible to raise money there. It's impossible to raise money or innovate in a European exchange. It's a little bit easier in Asia, but it's complicated. But then you do see some of these upstart exchanges that are trying to push and innovate in Abu Dhabi and KSA, etc. If you just take a step back for a second, I just love your perspective on what's going to happen to capital formation and specifically what does America need to do to get this next couple of trillion dollars to be brought on short?

Paul Atkins: Well, first of all, I think you know our our capital markets are the envy of the world. I mean, it really is amazing. uh when I travel through Europe or uh Japan and uh and the UK and and and Middle East and whatnot, people really envy our huge capital markets and how robust they are uh how fair they are. And it goes back to our rule of law and enforcability of contract. And that's the essence of what is the foundation uh of uh you know our freedom and our ability to uh you know do innovate and and have all these new products. So they would love to have that plus the um uh you know the I guess what they also really um envy is our uh risk appetite here in the United States where people uh are have an equity investment culture and that is really largely uh absent in Japan uh and in Europe and in a lot of ways they can't get out of their way because out of their own way because through their uh regulatory system and whatnot I mean ours is bad enough, but they um in many ways take it to a different extreme with a very narrowly constructed code that uh really hamstrings them and is is not very flexible in the future. So that's what as far as if we can uh open up our markets as far as you know some of the things that we've been talking about here as far as new products allow innovation to take place here on on shore and then also to fix some of the things like the accredited investor investor standard and that sort of thing. I think we you know can then to your point uh you know uh turbocharge it to continue our growth.

主持人: Crypto's been a bit of the wild west and we have things NFTTS, ICOs, meme coins. They feel they look like stocks to people, whether it's dollar sign Trump or dollar sign Doge, whatever it is, but they have a ticker symbol. They have a chart. They trade like a stock. What do we need to do in regards to crypto? What What should and where is the line between launching a a crypto token and the public being protected there? Chairman Atkins versus, hey, it's a publicly traded stock because for a lot of them, they get into it and they're the suckers at the table. It feels, it looks, it quacks like a duck. It looks like a duck and so they buy it like it's a duck, but it's not a duck, obviously. So, what do

主持人: And then this was Gensler's, I think, you know, maybe a logical point, although his execution was poor, there was a logical point to, hey, we have rules. we can't let you break these rules for your dollar sign whatever if everybody else is doing their company properly you know and following this set of rules so so how do we evolve that to protect which is the top mandate the consumer

Paul Atkins: well that's a great question I think the real problem has been uh definitionially and so the the kind of the very vague lines and so people weren't sure they were and as Mike was talking about you know people play paid lawyers a lot of money to try to do it. Some lawyers just gave happy talk and then people got in trouble uh with the SEC and other lawyers just said forget it. Go offshore. You know, you there's no use to even trying here in the United States. So, that's part of what uh you know, Mike and I are trying to do as far as harmonize. So, where if it's a tokenized security, then that's one thing under the SEC's uh rule book. But if it's things like uh tokenized uh oh so digital coin a digital token sorry or digital tools or digital collectibles then those sorts of things uh fall under the CFTC's um oversight and their uh rule book is is really more opposite for these sorts of things than ours is. But you have to have a logical oversight over things like that to prevent fraud because the one thing that really uh you know uh attracts people to our markets from overseas is that they uh perceive that there is you know that fraudsters do get caught and you know we have protections around as we've been talking about inside trading and then things like that trading on material non-public information by insiders that is you know so we we have a robust So

主持人: thing for that

主持人: Mike unpack that for us and maybe you could add to it the role of uh sometimes we see celebrities promoting these things and it just feels like it's a bit of uh it was a bit out of control there for a bit and and your job is to make it controlled. So so what should the crypto community that wants to release utility tokens and participate here what do they need to know going forward?

主持人: As we start to wrap here, I have a final question which is both of you sit on top again as I said the most in my opinion important capital market in the world. You guys are responsible for the well functioning and the pass through of literally tens and tens of trillions of dollars. You are responsible for enabling and not slowing down just the great vibrancy of the American economy as reflected in these markets. That's the upside. The downside is that that also comes with a lot of pressure when you're in the bowels of the job. And I obviously I don't know what that's like every day. But what are the couple of things that the two of you think about at night? What are the critical risks to this experiment that you just know you have to get right or the critical issues that in the next year or two you must get right for all of this to continue? Maybe Mike, we'll start with you and then Paul.

Michael Celig: Two big things concern me. The first has been this push of innovation offshore. We've got to get it back here in the United States. That's really what's built this country over the years. Thomas Ederson didn't have to go ask for permission to go innovate. We need to make sure that our builders, our visionaries, our entrepreneurs have the courage and and the confidence to come and and develop new things and build here in our financial markets. And that means blockchain, that means artificial intelligence, that means prediction markets. We'll set the rules for it. make sure that it's possible to do it, but we don't want everyone fleeing to the Cayman Islands and the Bahamas and and Russia to go do this stuff. So, so that's really concerning to me. I want to make sure that that folks are back here in the US. The second piece, of course, is the the risk to our system if we've got too much manipulation in trading fraud. I mean, why not trade uh you know, elsewhere and and there's real risk to our investors. And so making sure that we have the right controls, customer protections, uh we can't have another FTX in the United States where funds are lost and and there's uh an absolute fraud on on our American people. So So that's a really critical concern balancing innovation with our financial system, the integrity of our markets, and we're going to do it, but it's it's definitely hard work ahead of us.

Paul Atkins: And for me um so I mean I I agree completely with the innovation point that uh you know we we need to uh make sure that uh we are allowing people to innovate here on shore and FTX1 is a great point where uh there was one part of FTX that was didn't implode with the rest of it and that was their investment in uh swap's trading platform called LedgerX was which was supervised by the CFTC and examined and they had um uh they they had their uh accounts segregated and all that. So no customers uh uh lost any money through that and and it still lives on uh you know today. So um so my worry is that we're fighting always the last battle. You know the French built the Majino line and that didn't work very well and then uh so we had the same thing coming out of the financial crisis. So we have to think ahead. We're confronting a lot of new challenges. So artificial intelligence of course you know is uh you know developing very quickly and um but we're also seeing it on the fraud side. I mean, this horrible stories I hear about uh people whose uh um who've lost their entire retirement uh um nest egg through fraud where they're confidence people who uh you know through all sorts of manipulative types of communications then uh draw people in and get them to uh you know send off their their money elsewhere or even their uh their Coinbase account or things like that where they give passwords away with the you know these confidence artists out there. So we have to be attuned to that. We have to be the cop on the beat because that's the real threat uh that will uh lead people not to uh necessarily um you know invest their money here. But but I think you know we are a cop on the beat. We're um you know out to make sure that we can find the bad guys, but we can't then put too much overwhelming uh you know restrictions on the good guys so that they can't innovate and can't come out with new products.

主持人: Those are great answers. I think both opportunity and policing. I just want to end with a final thought. As these markets open up, wagering stocks, crypto, we do have an issue, a second order effect that's happening. young men 18 to 30, 45% report that they've had a problem with wagering gambling and 10% meet the addiction criteria. A third have placed a bet. The upside to this in my mind is we have a generation generation bet that understands capital formation markets and how to participate in them. But we do have a downside.

Paul Atkins: Outcomes. Yeah.

主持人: Outcomes. Yes. and to really think about that. There's obviously a downside here, which is a very young developing brain might not be ready for that. So, so Mike and then and then Chairman Atkins, what are your thoughts on how to protect these young men who, you know, they're they're excited about participating in these markets, but maybe their brains aren't fully formed and ready to take on that responsibility?

Michael Celig: I think education's critical here. We need to make sure that our market participants are providing information to participants and we don't regulate the casinos and the gambling and all of that and and I but I do believe that that is a a key piece of their initiative as well to make sure that folks are informed when they're coming into to the casinos. We should do the same at the federal level. make sure that our participants voluntarily of course this isn't necessarily something that that we mandate on our derivatives exchanges but I do think it's an important thing to be informing the public and of course we've got really robust standards on brokers and on our exchanges and they're making sure that there's uh the the persons that are participating in the markets have the ability to participate that they're suitable to invest and and participate in our markets and I think those controls combined with some education are really going to be important here

Paul Atkins: I agree with that And but it's not just education of the um in many cases children or and uh you know adult young men and and women too but it's also their parents uh you know especially for the children where I think there is a large ignorance on uh the parents' part as to you know what their kids are doing and with their phones or elsewhere and you know getting involved in these things. So uh you know I hear that from a lot of my friends. So just uh you know apocryphily there but uh so that's we we shouldn't forget that the schools are important as well but the signs of you know that sort of uh addiction you know are really uh you know important to to recognize uh that and then take action. But we have the same thing with other sorts of gambling lotto or lotteryies and that sort of thing. So, it's not just in the securities markets or crypto markets or elsewhere. Um, but it's uh also on everyday things that we have to really watch out for.

主持人: I love your suggestion, Mike, because uh I I noticed Robin Hood now if you want to go trade something complex, puts, calls, you know, spreads, everything, it forces you to go through a little wizard to make sure you understand it and and to teach you what exactly you're doing. So, I think education so critical and it can exist at the platform level. This has been an incredible hour plus. Uh, I want to thank you two gentlemen for joining us here on the All-In interview and we'll see you all next time. Bye-bye.

Paul Atkins: Thanks, gentlemen.

主持人: I'm going all in.