Regulators Team Up to Clear Path for Crypto Innovation

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have announced a collaborative initiative aimed at reshaping the regulatory landscape for crypto assets and derivatives. In a joint statement issued by SEC Chairman Paul S. Atkins and CFTC Acting Chairman Caroline D. Pham, the agencies emphasized the importance of harmonizing regulatory frameworks to foster innovation and investor confidence. This effort follows the release of a staff-level statement clarifying that exchanges registered with either agency can facilitate the trading of certain spot crypto asset products, a development framed as a critical first step in supporting the growth of digital asset markets [1].

The joint staff statement outlines a broader vision for regulatory cooperation, including efforts to harmonize definitions of products and venues, streamline reporting and data standards, align capital and margin frameworks, and establish coordinated innovation exemptions using each agency's existing authority. The agencies also highlighted the need to address jurisdictional gaps that may hinder innovation by creating regulatory "no man’s lands." According to the statement, such uncertainty has previously suppressed economic activity despite the legality of certain products under federal law. By aligning their approaches, the SEC and CFTC aim to reduce these barriers and enhance clarity for market participants [2].

One of the key initiatives under this new framework is a joint roundtable scheduled for September 29, 2025, which will bring together stakeholders to discuss regulatory harmonization priorities. The event, hosted at the SEC in Washington, D.C., will be open to the public and webcast live. The roundtable is intended to catalyze further coordination on issues such as 24/7 trading, perpetual contracts, and portfolio margining—areas where the agencies see significant potential for improving market efficiency. The SEC and CFTC believe that these measures could help U.S. markets better compete globally by aligning with the realities of a decentralized, always-on financial ecosystem [3].

A core focus of the initiative is portfolio margining, an area where current regulatory divergence between the SEC and CFTC creates inefficiencies for market participants. By coordinating their frameworks, the agencies aim to enable more efficient collateral management and reduce the capital costs for firms involved in cross-market strategies. Portfolio margining could allow broker-dealers and futures commission merchants to net exposures across products, potentially freeing up balance sheet capacity and lowering barriers to entry for both institutional and retail investors [1].

In addition to portfolio margining, the agencies are exploring ways to expand trading hours for certain markets, particularly in crypto assets, which already operate on a continuous basis. This could help align U.S. markets with global financial systems and encourage onshore trading of innovative products that have traditionally moved overseas due to regulatory fragmentation. The statement also highlights the potential for introducing perpetual contracts—derivatives without defined expiry dates—on U.S. exchanges, subject to robust risk controls and investor protections [1].

The initiative also includes provisions to support decentralized finance (DeFi) protocols by considering exemptions that would allow peer-to-peer trading of spot and derivative crypto assets. These exemptions are intended to facilitate innovation while the agencies work on long-term rulemaking. The agencies stressed that such efforts align with a broader commitment to preserving the U.S. as a global hub for financial innovation. By reducing red tape and fostering regulatory clarity, the SEC and CFTC aim to ensure that America remains the premier location for launching and scaling crypto-related businesses [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 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] Will Co-Host Roundtable Sept. 29 (https://www.sec.gov/newsroom/press-releases/2025-112-sec-cftc-issue-joint-statement-regulatory-harmonization-efforts-will-co-host-roundtable-sept-29)