U.S. Regulators Aim to Reclaim Crypto Innovation With Unified Rules

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have announced plans to collaborate on regulatory harmonization, with a specific focus on introducing regulated perpetual contracts into the U.S. market. Perpetual contracts, a type of derivative without a defined expiry date, are commonly traded in offshore crypto markets but face jurisdictional and definitional constraints in the U.S. The agencies are considering measures that would enable these contracts to meet investor protection and risk management standards, potentially allowing them to be listed on both SEC- and CFTC-regulated trading platforms [1]. This initiative aims to capture economic activity currently flowing exclusively to foreign platforms and provide U.S. traders with access to products with transparent leverage limits and robust risk management frameworks [3].

The push for regulatory clarity comes amid a broader effort to harmonize the SEC and CFTC’s regulatory frameworks and encourage the development of innovative financial products in the U.S. The agencies are also prioritizing areas such as 24/7 trading hours, event contracts, and portfolio margining, with the goal of creating a more competitive and resilient market environment [1]. A joint roundtable on regulatory harmonization is scheduled for Monday, September 29, 2025, in Washington, D.C., and will be open to the public and webcast live on the SEC’s website. The roundtable aligns with the President’s Working Group on Digital Asset Markets report, which emphasizes the need for the U.S. to maintain its leadership in digital financial technology [2].

The SEC and CFTC highlighted the challenges posed by fragmented oversight and legal uncertainty, which have historically driven financial innovation overseas. The agencies emphasized their commitment to using existing regulatory authorities to create a more unified and pro-innovation framework. They stated that harmonizing product and venue definitions, aligning capital and margin frameworks, and streamlining reporting and data standards could help reduce inefficiencies and foster a more competitive environment for market participants [1]. Such measures would not only benefit institutional investors but also lower barriers for retail participants to engage in cross-market strategies.

Innovation exemptions and decentralized finance (DeFi) were also identified as key areas for regulatory exploration. The agencies are prepared to consider exemptions that would allow market participants to engage in peer-to-peer trading of spot crypto assets and derivatives such as perpetual contracts over DeFi protocols. These exemptions would provide a temporary safe harbor while the agencies work on longer-term rulemaking. The statement also affirmed the importance of self-custody rights, a core American value, and encouraged market participants to engage with agency staff to facilitate onshore trading activity [1].

The joint efforts of the SEC and CFTC underscore a broader shift in the U.S. regulatory approach to digital assets. By fostering collaboration and reducing regulatory friction, the agencies aim to position the United States as a global leader in crypto and blockchain technology. The initiatives announced reflect a strategic alignment with the goals of the President’s Working Group report and are designed to promote U.S. competitiveness in the evolving global financial landscape [2]. The success of these measures will depend on the ability of the agencies to balance investor protection with the need to support innovation and market growth.

Source:

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

[2] SEC, CFTC seek to 'harmonize' on DeFi, perps contracts ... (https://www.theblock.co/post/369625/sec-cftc-seek-to-harmonize-on-defi-perps-contracts-and-more-plan-roundtable-later-this-month)

[3] The SEC and CFTC may consider introducing perpetual ... (https://www.panewslab.com/en/articles/68171a95-4440-47b4-ba5a-c2181614f2f7)