Regulators Open Doors for Spot Crypto Trading Innovation

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have issued a joint staff statement clarifying that SEC- and CFTC-registered exchanges are not prohibited from facilitating the trading of certain spot crypto asset products. The move aligns with the broader goals of the SEC’s “Project Crypto” and the CFTC’s “Crypto Sprint,” both of which aim to coordinate regulatory approaches to foster innovation in the digital asset sector while ensuring compliance with existing legal frameworks [1]. The joint initiative represents a coordinated effort to promote “trading venue choice and optionality” for market participants, as outlined in the President’s Working Group on Digital Asset Markets report, which advocates for regulatory clarity that supports blockchain-based innovation within the United States [2].

The joint staff statement emphasizes that under current law, SEC-registered national securities exchanges (NSEs), CFTC-registered designated contract markets (DCMs), and foreign board of trade (FBOTs) are not prohibited from facilitating the trading of certain spot crypto asset products. This view is consistent with the Commodity Exchange Act (CEA), which generally requires leveraged, margined, or financed retail commodity transactions to be conducted on CFTC-registered markets unless specific exceptions apply. One such exception permits retail commodity transactions to be listed on an SEC-registered NSE, and the joint staff now views this exception as potentially applicable to certain crypto assets [1]. This regulatory clarity is intended to provide market participants with the flexibility to explore new trading models without being constrained by ambiguous or conflicting requirements.

The statement also outlines several key considerations for market participants planning to engage in spot crypto asset trading, including margin, clearing, and settlement practices. The staff of both agencies has indicated that clearinghouses are permitted to partner with custodians to maintain customer accounts and that the SEC and CFTC are open to engaging with market participants on related questions. For instance, the SEC’s Division of Trading and Markets has expressed readiness to address inquiries from SEC-registered clearing agencies, while the CFTC’s Division of Clearing and Risk is available to assist CFTC-registered derivatives clearing organizations. This coordination between the two agencies aims to streamline the regulatory process and reduce redundancies for market participants seeking to launch or expand spot trading activities [1].

Market surveillance and data dissemination are also critical components of the joint initiative. The staff emphasizes that sharing reference pricing data among NSEs, DCMs, and FBOTs enhances effective market surveillance, and it encourages the public dissemination of transactions by these entities to provide investors with valuable transparency. Publicly available trade data can support more informed decision-making and foster trust in the emerging spot crypto market. The agencies have also highlighted that promoting fair and orderly markets is essential to ensuring robust competition and trading opportunities for participants. They are prepared to engage with trading venues on how to apply these principles in the context of spot crypto asset trading [1].

The joint staff statement has been welcomed by both the SEC and CFTC leadership as a significant step toward supporting innovation in the crypto space. SEC Chairman Paul Atkins has emphasized the importance of allowing market participants the freedom to choose where they trade spot crypto assets, while CFTC Acting Chairman Caroline Pham has described the initiative as a demonstration of the agencies’ shared commitment to supporting growth and development in the sector. These statements underscore a shift in the U.S. regulatory approach from one perceived as risk-averse under the previous administration to a more innovation-friendly stance under the Trump administration [3]. The joint staff effort is also viewed as a way to advance the administration’s goal of establishing the U.S. as a global leader in digital asset innovation [1].

Market participants are encouraged to reach out to the staff of the SEC and CFTC with any questions or concerns regarding the implementation of these views. The agencies have indicated their readiness to support the review and approval of proposals by DCMs, FBOTs, and NSEs seeking to facilitate trading in certain spot crypto asset products. The collaborative approach between the SEC and CFTC is expected to provide a clearer regulatory path for exchanges and trading platforms looking to enter or expand in the spot crypto market, potentially reducing uncertainty and encouraging further investment in U.S.-based digital asset infrastructure [1]. The joint statement serves as a non-binding guidance document, meaning it does not alter applicable law but offers interpretive support to market participants navigating the regulatory landscape.

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] U.S. SEC, CFTC Combine Forces to Clear Registered ... (https://www.coindesk.com/policy/2025/09/02/u-s-sec-cftc-combine-forces-to-clear-registered-firms-trading-of-spot-crypto)