Crypto Regulation Crossroads: SEC vs. CFTC Jurisdiction Battle Intensifies

The U.S. Securities and Exchange Commission (SEC) is advancing efforts to establish a formal regulatory framework for cryptocurrencies through the proposed Crypto Market Structure Bill, a move aimed at addressing critical gaps in market oversight. SEC Chair Paul S. Atkins has emphasized the need for proactive rule-making to align crypto market structures with traditional financial safeguards while accommodating blockchain-based assets. The legislation, which builds on the GENIUS Act, seeks to enhance trading transparency, prevent market manipulation, and standardize investor protections. By mandating enhanced reporting by crypto platforms and standardized disclosures, the bill aims to foster institutional participation and reduce regulatory uncertainty in the digital asset spaceSEC Chair Pushes Crypto Market Structure Bill — XRP Weak Hands Exit^[1].

Parallel developments in Congress highlight a potential shift in regulatory authority. A House Financial Services Committee draft bill proposes reclassifying certain "digital commodities" as outside SEC jurisdiction, shifting oversight of their secondary trading to the Commodity Futures Trading Commission (CFTC). The legislation defines "mature blockchain systems" as those with open-source, decentralized structures and no single entity controlling more than 20% of a token supply. Tokens like Ethereum, Solana, and XRP are seen as meeting these criteria, though XRP’s regulatory status remains uncertain due to Ripple’s control of a significant portion of its supply. The bill also allows the SEC to exempt pre-existing tokens, such as XRP, on a case-by-case basisNew House Market Structure Bill Would End SEC Oversight Over Most Crypto Assets^[2].

Meanwhile, on-chain metrics for XRP suggest a potential market inflection. Short-Term Holder (STH) Net Unrealized Profit/Loss (NUPL) has approached capitulation levels, indicating short-term holders are exiting at a loss, a pattern historically preceding accumulation phases. The Network Value to Transactions (NVT) ratio for XRP has hit a five-month low, signaling undervaluation relative to network activity. Analysts note that such conditions often precede price rebounds, with XRP’s current $2.94 level potentially setting the stage for a move toward $4.20SEC Chair Pushes Crypto Market Structure Bill — XRP Weak Hands Exit^[1].

The regulatory and market dynamics intersect with broader crypto adoption trends. The SEC’s delayed approval of spot ETFs has created uncertainty, but the Market Structure Bill and potential CFTC oversight could provide clarity, influencing demand for XRP and other tokens. October is emerging as a critical month, with legislative outcomes and ETF decisions expected to shape investor sentiment. On-chain data and regulatory developments collectively suggest a market nearing a turning point, balancing institutional interest with retail and long-term holder activityXRP News Today: Market Structure Bill Influences ETF Outlook^[3]XRP Price News: Holds Above $3 With Market Structure Bill, ETFs, and the Fed in Focus^[4].