Regulators Unify Crypto Rules to Fuel U.S. Innovation Leadership

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have announced a joint initiative aimed at harmonizing regulatory frameworks for crypto markets. This effort, driven by recent statements from both agencies, reflects a commitment to addressing fragmentation and regulatory uncertainty that have historically hindered innovation in the digital asset space. The SEC and CFTC have emphasized the need for coordinated action to ensure that the U.S. remains a leader in financial innovation, particularly as the markets for securities and non-securities increasingly converge.

Key components of the joint initiative include the harmonization of product and venue definitions, streamlining reporting and data standards, and aligning capital and margin frameworks. The agencies also aim to explore coordinated innovation exemptions using their existing authority, which could allow market participants to engage in activities such as peer-to-peer trading of spot crypto assets and perpetual contracts. These measures are intended to create a regulatory environment that supports innovation while maintaining investor protections and market integrity.

The recent joint staff statement from the SEC and CFTC clarified that current U.S. law does not prohibit exchanges from facilitating trading of certain spot crypto asset products. This is a significant development, as it brings digital assets within the existing regulatory perimeter for securities and futures exchanges. The agencies have also indicated that regulatory clarity will be extended to non-U.S. exchanges operating in jurisdictions with comparable regulatory regimes, leveraging frameworks such as substituted compliance and mutual recognition. This cross-border approach is expected to facilitate onshoring of trading activity and enhance U.S. market competitiveness.

The agencies have also announced a joint roundtable on September 29, 2025, to further discuss regulatory harmonization. The roundtable will focus on areas such as 24/7 market operations, event contracts, perpetual contracts, and portfolio margining. For example, the potential expansion of trading hours could better align U.S. markets with the global, always-on economy. Portfolio margining, in particular, could reduce capital inefficiencies by recognizing offsetting positions across product classes, thereby lowering barriers for institutional and retail participation in cross-market strategies. The discussion will also explore opportunities for innovation exemptions and decentralized finance (DeFi), allowing peer-to-peer trading of spot crypto assets through DeFi protocols.

Both agencies acknowledge the importance of reducing regulatory friction to unlock new opportunities for market participants and investors. By harmonizing their approaches, the SEC and CFTC aim to foster a competitive and innovative financial ecosystem that supports American leadership in crypto and blockchain technology. Acting CFTC Chairman Caroline D. Pham emphasized the need for a “durable and flexible” regulatory approach that avoids the pitfalls of past policies, such as those seen with the Dodd-Frank Act. This approach is expected to streamline market access and promote the onshoring of financial activity that has been historically driven to foreign jurisdictions due to U.S. regulatory uncertainty.

The joint initiative builds on the recommendations of the President’s Working Group on Digital Asset Markets, which called for a pro-innovation mindset and the adoption of regulatory frameworks that are adaptable to the evolving digital asset landscape. The agencies have already taken steps to implement these recommendations, including the launch of the CFTC’s Crypto Sprint, which includes public consultations on listed spot crypto trading and other key issues. These efforts are part of a broader strategy to ensure that the U.S. remains at the forefront of financial innovation and that American businesses can compete globally in the digital economy.