Regulators Light the Path for Crypto Trading in U.S. Markets

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have taken a significant step toward fostering a cohesive regulatory approach for spot crypto trading by issuing a joint staff statement affirming that exchanges registered with either agency may facilitate trading in certain spot crypto asset products under existing laws. The clarification, issued on September 2, 2025, by the SEC’s Division of Trading and Markets and the CFTC’s Divisions of Market Oversight and Clearing & Risk, removes a longstanding legal ambiguity that had deterred exchanges from offering such services within the U.S. regulatory framework [8].

According to the joint guidance, SEC-registered national securities exchanges and CFTC-designated contract markets are permitted to list spot crypto commodity products, provided they comply with applicable regulatory requirements. This includes leveraged and margined retail transactions, which were previously confined to unregulated platforms. The agencies emphasized that while the statement does not constitute a new rule or legal safe harbor, it reflects a staff-level interpretation of existing law that could enable a broader range of crypto assets, including Bitcoin and Ethereum, to be listed on regulated venues. The move aligns with broader initiatives like the SEC’s "Project Crypto" and the CFTC’s "Crypto Sprint," both aimed at clarifying the regulatory perimeter for digital assets [2].

The joint statement also signals a coordinated effort to harmonize regulatory approaches, with both agencies pledging to review exchange proposals for spot crypto products on an expedited basis and to remain available for stakeholder engagement. This collaborative stance is expected to streamline the process for exchanges seeking to list digital assets, offering greater legal certainty and reducing the risk of fragmented oversight. The agencies have also invited market participants to engage with staff to discuss proposals, reinforcing a proactive and supportive regulatory environment [8].

Among the key operational considerations outlined in the statement are enhanced custodial and clearing arrangements, robust market surveillance mechanisms, and transparent data reporting. The SEC and CFTC stressed the importance of maintaining investor protections and market integrity, with particular emphasis on secure custody solutions and fair execution of trades. For example, clearinghouses are encouraged to partner with qualified custodians to manage customer accounts, while exchanges are expected to share reference pricing data across platforms to ensure transparency. These measures aim to mitigate risks associated with market manipulation and fraud while fostering trust among investors [8].

Looking ahead, the joint initiative is part of a broader effort to realign U.S. financial markets with the realities of a global, always-on economy. The agencies are considering measures such as extended trading hours, which could align U.S. markets with continuous trading environments seen in crypto, gold, and foreign exchange markets. Additionally, they are exploring frameworks for event contracts—derivatives tied to specific events—and perpetual futures contracts, which are prevalent in offshore crypto markets. These innovations, if implemented, could bring more trading activity back to U.S. platforms, enhancing market liquidity and competition [4].

The joint roundtable on regulatory harmonization, scheduled for September 29, 2025, will further explore these and other proposals, including portfolio margining and innovation exemptions for decentralized finance (DeFi) protocols. Portfolio margining, in particular, could reduce capital inefficiencies by allowing firms to net exposures across asset classes, thereby lowering barriers for both institutional and retail participants. Innovation exemptions, meanwhile, aim to create structured environments for peer-to-peer trading of spot and derivatives products without compromising investor protections. These efforts are intended to reinforce the U.S.'s position as a global leader in financial innovation while ensuring that regulatory frameworks support rather than hinder technological advancement [1].

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 and CFTC staff clear path for spot crypto trading on ... (https://www.aoshearman.com/en/insights/ao-shearman-on-fintech-and-digital-assets/sec-and-cftc-staff-clear-path-for-spot-crypto-trading-on-regulated-exchanges) [3] SEC and CFTC Propose Shift to 24/7 Financial Markets ... (https://cointelegraph.com/news/sec-cftc-statement-24-7-capital-markets) [4] SEC and CFTC join forces to strengthen US crypto oversight (https://cryptoslate.com/sec-and-cftc-aim-to-harmonize-crypto-rules-boost-us-market-leadership/) [8] US SEC and CFTC Clarify Rules for Spot Crypto Asset ... (https://charltonsquantum.com/us-sec-cftc-joint-statement-spot-crypto-asset-trading/)