U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins recently stated that regulators should remain calm in the face of dropping crypto prices. He advocated for focusing on developing a regulatory framework rather than intervening in the market following Bitcoin’s decline towards $66,000.

The SEC’s strategy emphasizes the importance of structural rulemaking and the agency’s mission over momentary price fluctuations.

Regulators Address Market Downturn With Policy Agenda

During his address at ETHDenver on February 18, along with Commissioner Hester Peirce, Atkins acknowledged market declines but dismissed the notion that the SEC ought to react to such fluctuations.

“It is not the regulator’s job to worry about the daily swings of the markets,” Atkins stated. “People whose only focus is on the number always going up are likely to be disappointed.”

Currently, with Bitcoin close to $66,000, the market is under review, with analysts eyeing the $60,000 support level as a potential hurdle. Meanwhile, Ripple’s XRP saw a nearly 5% fall to $1.40, and Ethereum (ETH) slipped below $2,000. Some experts, including Mike McGlone from Bloomberg Intelligence, have warned about further declines, reiterating a pessimistic $10,000 forecast for Bitcoin shortly before Atkins’s remarks.

Rather than reacting to price shifts, Atkins outlined several regulatory initiatives under “Project Crypto,” a joint initiative with the Commodity Futures Trading Commission (CFTC). The goals include developing frameworks for crypto asset classifications, establishing rules for tokenized securities in automated markets, and providing guidelines for non-security asset custody, including stablecoins.

Building a Framework Beyond Market Cycles

The SEC’s recent shifts indicate a move away from stringent enforcement, with Atkins noting that the agency has opted to drop numerous crypto-related cases, moving away from policies that have been characterized as “regulation by enforcement.” Peirce emphasized that the downturn could provide opportunities for developers, urging that mere regulatory clarity doesn’t equate to value creation.

“You have to build stuff that people want and need,” Peirce said. “That is the best way to garner support on both sides of the aisle in Washington.”

Atkins also urged developers to interact with the SEC for an “innovation exemption,” which would allow limited trading of tokenized securities on decentralized platforms temporarily, enabling experimentation while the SEC formulates permanent rules.

“Put your nose to the grindstone and work to build things that matter,” Atkins advised. “That is how you transform Schadenfreude to Freudenfreude—the happiness derived from others’ successes.”