U.S. Regulators Chase Global Crypto Edge with Joint Overhaul Plan

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have announced a joint roundtable to address regulatory harmonization in the crypto and financial markets, scheduled for September 29, 2025. This initiative marks a significant step in aligning the regulatory frameworks of the two agencies, aiming to address jurisdictional overlaps and unlock opportunities for innovative products. The roundtable follows a joint statement from SEC Chairman Paul S. Atkins and CFTC Acting Chair Caroline D. Pham, who emphasized the need for regulatory cooperation to foster economic activity and maintain U.S. leadership in financial innovation [1].

A primary focus of the roundtable will be the potential onshoring of perpetual futures contracts, a derivative instrument commonly traded offshore in the crypto market. These contracts, which allow traders to hold positions indefinitely without a defined expiry date, have become a popular tool for speculation and hedging. Currently, U.S. regulatory constraints have limited their availability within the country. The SEC and CFTC are exploring ways to harmonize their oversight to allow perpetual contracts to trade on U.S.-regulated platforms, provided investor protections and risk controls are in place [3]. This move aims to bring economic activity currently concentrated in offshore markets back to the United States and provide U.S. traders access to products with transparent leverage limits and robust risk management [2].

In addition to perpetual contracts, the roundtable will address broader issues such as portfolio margining, which involves recognizing offsetting positions across product classes to reduce capital inefficiencies. Presently, traders are required to post collateral separately at SEC-registered and CFTC-registered entities, even when positions hedge each other. Harmonizing margin requirements could allow market participants to net exposures more efficiently, reducing the cost of carrying hedged positions and freeing up balance sheet capacity [1]. This, in turn, may lower barriers for institutional and retail participation in cross-market strategies and strengthen the resilience of U.S. markets against global competition.

The regulatory harmonization effort also includes a review of 24/7 trading hours for certain markets, especially in digital assets. With global crypto markets operating around the clock, the agencies are considering whether U.S. markets should expand trading hours to better align with the global financial landscape. Such a shift could improve price discovery and attract larger institutional investors who require continuous access. However, any decision will depend on operational feasibility and the need to maintain investor and customer protections [1].

Another key topic for discussion is the development of innovation exemptions to support decentralized finance (DeFi) protocols. These exemptions could create safe harbors for peer-to-peer trading of spot crypto assets and derivatives, enabling firms to test new products under a regulatory sandbox. The SEC and CFTC aim to provide legal clarity while protecting investors, ensuring that the U.S. remains a hub for financial innovation. This approach aligns with the broader goal of using existing authorities to establish fit-for-purpose regulations for emerging products and platforms [2].

The joint efforts between the SEC and CFTC come at a strategic moment as other jurisdictions, including the EU, Singapore, and Hong Kong, are rolling out comprehensive crypto frameworks. U.S. regulators, historically constrained by fragmented oversight, are now taking proactive steps to enhance coordination and competitiveness. By leveraging their combined expertise, the agencies aim to position the U.S. as a leader in global financial innovation. The September 29 roundtable will bring together regulators, industry leaders, and academics to shape the next phase of this initiative, potentially leading to recommendations for regulatory reforms and rule changes [2].

Source:

[1] Joint Statement from the Chairman of the SEC and Acting ... (https://www.sec.gov/newsroom/speeches-statements/joint-statement-atkins-pham-090525)

[2] SEC, CFTC Unite on Crypto Rules Ahead of Sept 29 ... (https://www.thearizonatribune.com/sec-cftc-join-forces-crypto-defi/)

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