Regulators Unite to Solve Crypto's Cross-Border Paradox

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have signaled a new phase of regulatory collaboration aimed at fostering financial innovation and enhancing competitiveness in the global crypto markets. In a joint statement issued on September 5, 2025, the two agencies outlined their commitment to harmonizing regulatory frameworks to address jurisdictional and definitional barriers that have historically driven trading activity overseas. This shift follows a broader push to align U.S. markets with evolving global competition and comes ahead of a joint roundtable on regulatory harmonization scheduled for September 29, 2025 [1].

A key focus of the collaboration is the potential onshoring of perpetual futures contracts—derivatives with no defined expiry date—which are widely used in offshore crypto markets but largely unavailable in the U.S. due to jurisdictional constraints. The agencies indicated they may consider steps to permit trading of perpetual futures on SEC- and CFTC-regulated venues, provided investor protections and risk controls are met. This move could bring increased transparency, leverage limits, and robust risk management to U.S. investors while capturing economic activity currently flowing to foreign platforms [1].

The joint statement also highlighted the importance of streamlining regulatory requirements, such as portfolio margining and reporting standards, to reduce inefficiencies in cross-market trading. Current rules often force traders to post separate collateral at SEC- and CFTC-registered entities, even when positions hedge each other economically. Harmonizing these rules could lower capital requirements, free up balance sheet capacity, and encourage broader participation from institutional and retail investors [2].

In addition, the agencies emphasized the potential for “innovation exemptions” to support decentralized finance (DeFi) protocols, which enable peer-to-peer trading without intermediaries. These exemptions could create safe harbors for leveraged or margined crypto asset transactions, including perpetual contracts, while the agencies work toward long-term rulemaking. The initiative aligns with the Trump administration’s efforts to establish the U.S. as a global crypto innovation leader and complements recent legislative developments, including a stablecoin regulation bill signed into law [3].

The joint efforts between the SEC and CFTC reflect a broader strategy to address regulatory uncertainty that has hindered market development. According to the joint statement, lack of coordination between the two agencies has previously “chilled productive economic activity” despite products being permissible under federal law. The agencies aim to create a “reliable playbook” for innovators and investors, ensuring that U.S. markets remain at the forefront of financial technology while preserving investor protections [4].

The collaborative approach is part of the SEC’s Project Crypto and the CFTC’s Crypto Sprint initiatives, both aimed at fostering a clear and supportive regulatory environment for digital asset markets. Market participants, including exchanges such as Nasdaq and the New York Stock Exchange, are anticipated to benefit from this regulatory clarity, with potential opportunities to offer spot trading in major cryptocurrencies like Bitcoin and Ethereum [5].

Source:

[1] SEC And CFTC Signal Openness To Onshoring Perpetual Futures For US Investors (https://www.benzinga.com/crypto/cryptocurrency/25/09/47524351/sec-and-cftc-signal-openness-to-onshoring-perpetual-futures-for-us-investors)

[2] Joint Statement from the Chairman of the SEC and Acting Chair of the CFTC (https://www.cftc.gov/PressRoom/SpeechesTestimony/phamatkinsstatement090525)

[3] SEC and CFTC to coordinate crypto efforts (https://blockworks.co/news/sec-cftc-crypto-coordination)

[5] SEC and CFTC's new joint guidance 'opens the door for...' (https://www.theblock.co/post/369192/sec-cftc-new-joint-guidance)