Regulators Race to Close Gaps in Evolving Crypto Markets

The Senate Banking Committee has completed final revisions to its proposed market structure reform bill, with the goal of finalizing the text by the end of September 2025. The bill, driven primarily by the committee’s Republican majority, aims to address regulatory gaps in the rapidly evolving digital asset market and is expected to be marked up by the end of the month. Following that, the Agriculture Committee is anticipated to review the bill in October, with a full Senate vote potentially occurring by November or December. The timing remains subject to the evolving dynamics of the legislative process and the likelihood of bipartisan support.

The bill reflects months of consultations with industry stakeholders and lobbyists, with the committee’s staff fielding extensive feedback during the summer. While Republicans have been the primary architects of the reform effort, the final draft is being designed to allow Democratic members the opportunity to review and offer input ahead of the markup. This approach signals a strategic shift toward seeking broader consensus, especially with key figures like Sen. Kirsten Gillibrand (D-NY) potentially aligning with the pro-crypto faction within the Democratic Party. However, Sen. Mark Warner (D-VA), a key Democratic voice on the committee, has warned that rushing to schedule a markup by Sept. 30 could significantly reduce the chances of a bipartisan outcome, emphasizing the importance of careful deliberation.

In a related development, the SEC and CFTC issued a joint staff statement clarifying that registered exchanges are not prohibited from facilitating the trading of certain spot crypto asset products. The statement, part of the SEC’s Project Crypto and the CFTC’s Crypto Sprint, aims to promote regulatory clarity and encourage innovation in the crypto market by removing ambiguities regarding exchange operations. The collaborative effort between the two agencies reflects a broader strategy to position the United States as a global leader in digital financial technology. SEC Chairman Paul Atkins and CFTC Acting Chairman Caroline D. Pham underscored that the regulatory landscape should support innovation and competition rather than hinder it, particularly in the wake of previous regulatory uncertainties that had driven some crypto activity overseas.

The joint statement also outlines key considerations for market participants, including the facilitation of margin, clearing, and settlement for spot crypto asset products. It emphasizes the potential for cross-agency coordination to enhance market surveillance and public dissemination of trade data, which could improve transparency and investor confidence. Furthermore, the statement notes that the regulatory frameworks of both the SEC and CFTC should evolve in tandem to avoid creating "regulatory no man’s lands" where innovation might be stifled. The Divisions of Trading and Markets (SEC) and Market Oversight and Clearing and Risk (CFTC) have made it clear that they are prepared to engage with market participants to address any regulatory questions and facilitate the listing of spot crypto products on registered exchanges.

Looking ahead, the SEC and CFTC have announced plans for a joint roundtable on regulatory harmonization, scheduled for September 29, 2025. This event will serve as a platform for further discussion on aligning regulatory approaches to support the development of innovative products such as perpetual contracts, prediction markets, and event contracts. The agencies are also considering the potential for expanded trading hours to better align U.S. markets with the global, 24/7 nature of crypto trading. Additionally, the possibility of portfolio margining across product classes is under review, which could reduce capital inefficiencies and encourage broader participation in cross-market strategies.

The Senate Banking Committee’s market structure reform efforts, combined with the regulatory developments at the SEC and CFTC, signal a pivotal shift in the U.S. approach to digital asset markets. These initiatives are expected to foster greater clarity, reduce regulatory friction, and ultimately promote a more competitive and innovative financial ecosystem. The coming months will be critical in determining the extent to which these efforts translate into concrete legislative and regulatory action, with the final outcome likely to have far-reaching implications for the future of crypto markets in the United States.

Source:

[1] title1 (https://www.banking.senate.gov/newsroom/majority/chairman-scott-senate-banking-colleagues-consider-several-key-presidential-nominations-in-full-committee-hearing)

[2] title2 (https://www.cryptoinamerica.com/p/senate-banking-finalizes-details)

[3] title3 (https://www.sec.gov/newsroom/press-releases/2025-110-sec-cftc-staff-issue-joint-statement-trading-certain-spot-crypto-asset-products)

[4] title4 (https://www.sec.gov/newsroom/speeches-statements/sec-cftc-project-crypto-090225)

[5] title5 (https://www.cftc.gov/PressRoom/SpeechesTestimony/phamatkinsstatement090525)