Regulators Clear Path for Crypto Innovation with Unified Trading Framework

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have jointly announced a framework enabling the trading of certain spot crypto asset products on registered exchanges. The move, part of the SEC’s Project Crypto and the CFTC’s Crypto Sprint, aligns with the recommendations of the President’s Working Group on Digital Asset Markets to promote regulatory clarity and foster innovation within the U.S. digital financial technology sector. The agencies emphasized that current law does not prohibit registered exchanges from facilitating such trading, provided they meet regulatory requirements and seek appropriate relief where necessary.

The joint staff statement clarifies that both SEC- and CFTC-registered exchanges—such as national securities exchanges, designated contract markets, and foreign boards of trade—are not legally barred from offering these products. This includes the use of leverage, margin, or financing in certain retail transactions, a practice previously restricted under the Commodity Exchange Act (CEA). The CEA had required such transactions to be conducted on CFTC-registered platforms unless exempted. The Divisions’ view now is that SEC-registered exchanges may also facilitate these products, provided they do not engage in activities that fall under the CEA’s jurisdiction without appropriate regulatory relief.

Key considerations outlined by the Divisions include the handling of margin, clearing, and settlement mechanisms, as well as the need for transparent public dissemination of trade data to ensure market integrity. The staff emphasized that clearinghouses can partner with custodians to manage customer accounts, and both the SEC and CFTC divisions stand ready to address regulatory queries from market participants. Additionally, the Divisions highlighted the importance of shared reference pricing and surveillance tools among exchanges to enhance market oversight and prevent market abuses.

The joint initiative also underscores the agencies’ commitment to supporting technological innovation while maintaining investor and customer protections. SEC Chairman Paul Atkins and CFTC Acting Chairman Caroline Pham both stated that the move represents a significant step toward reversing the regulatory uncertainty of recent years. Pham noted that the previous administration’s inconsistent approach discouraged innovation, but that the new framework would allow the U.S. to reassert its position as a global leader in crypto markets. Atkins added that the initiative ensures market participants can choose where to trade spot crypto assets, thereby promoting competition and choice.

In parallel, the CFTC has also updated its rules for foreign boards of trade (FBOTs), allowing offshore crypto exchanges to serve U.S. clients under a single registration. This clarification addresses longstanding confusion about whether foreign exchanges needed to register as both FBOTs and designated contract markets (DCMs). The new guidance enables platforms like Binance.US to operate more efficiently within the U.S. regulatory landscape. The CFTC’s Acting Chair reiterated that the goal is to provide clarity and encourage responsible market participation while ensuring U.S. investors gain access to global crypto markets.

The Divisions’ joint effort signals a broader shift in the U.S. regulatory approach to digital assets, with a focus on creating a structured, yet flexible environment for innovation. Market participants are now invited to engage with SEC or CFTC staff to address any questions regarding regulatory compliance or operational requirements. The initiative reflects a strategic alignment between the agencies to reduce regulatory friction and support the development of a robust, transparent, and competitive crypto market in the U.S.

Source:

[1] SEC-CFTC Joint Staff Statement (Project Crypto- ...) (https://www.sec.gov/newsroom/speeches-statements/sec-cftc-project-crypto-090225)

[2] SEC and CFTC Staff Issue Joint Statement On Trading ... (https://www.sec.gov/newsroom/press-releases/2025-110-sec-cftc-staff-issue-joint-statement-trading-certain-spot-crypto-asset-products)

[3] SEC and CFTC open doors for spot crypto trading on US- ... (https://cryptobriefing.com/sec-cftc-outline-crypto-framework-on-chain-trading-rules/)

[4] CFTC and SEC Staff Issue Joint Statement on Trading ... (https://www.cftc.gov/PressRoom/PressReleases/9112-25)

[5] New FBOT Rules Open U.S. Market to Offshore Crypto ... (https://coinpaper.com/10793/offshore-crypto-platforms-can-now-legally-return-to-the-u-s-market)