Regulators Unite to Solve Crypto’s Cross-Border Chaos

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are taking coordinated action to harmonize regulatory approaches in the digital asset sector, aiming to strengthen U.S. leadership in financial innovation and investor protection. In a joint initiative, the agencies will hold a roundtable on Sept. 29 to discuss measures for regulatory alignment following a Sept. 5 joint statement highlighting the need for cooperation after years of fragmented oversight [1]. The agencies emphasized that a lack of coordination has created regulatory uncertainty, discouraged innovation, and driven some crypto activity overseas [1].

SEC Chairman Paul Atkins and CFTC Acting Chairman Caroline Pham stated that harmonization can lower barriers to market entry, improve operational efficiency, and reinforce the U.S. position in global financial markets [1]. The joint effort reflects the broader mandate of the President’s Working Group on Digital Asset Markets, which recommended a framework that supports innovation while ensuring investor safeguards [1]. A key goal of the collaboration is to align U.S. markets with the global, always-on economy, where digital assets and derivatives often trade around the clock [1].

Among the proposals under consideration is the expansion of trading hours across asset classes such as foreign exchange, gold, and crypto. Regulators noted that extending trading windows could enhance liquidity and align U.S. markets with international counterparts [1]. The agencies also plan to examine frameworks for prediction markets and perpetual contracts, with a focus on clarifying rules for event-based contracts and facilitating the onshoring of compliant perpetual swaps [1]. These steps are intended to channel more trading activity back into U.S. platforms.

Portfolio margining is another area of focus. A coordinated margining framework could allow firms to offset positions across asset classes, reducing capital inefficiencies. The SEC and CFTC emphasized that harmonized margin requirements could simplify risk management while preserving necessary safeguards [1]. In addition, the regulators intend to explore safe harbor exemptions for decentralized finance (DeFi) projects. These exemptions would create structured environments for peer-to-peer trading of spot, leveraged, or margined products without undermining investor protection standards [1].

The joint regulatory effort is part of broader initiatives such as the SEC’s Project Crypto and the CFTC’s Crypto Sprint, and it aligns with the Trump administration’s July report on digital asset policy. The report urged the SEC and CFTC to establish cooperative oversight, with the CFTC holding clear authority over spot crypto markets and the SEC overseeing tokenized securities [4]. In August, the CFTC introduced a pathway for offshore crypto exchanges to serve U.S. clients under the Foreign Board of Trade (FBOT) framework [4]. The report also highlighted the need for quantum-resistant architecture to protect cryptographic protocols from future threats posed by quantum computing [4].

The SEC and CFTC staff recently issued a joint statement clarifying that registered exchanges are not prohibited from facilitating the trading of certain spot commodity products. This initiative supports the goal of promoting trading venue choice and optionality for market participants [2]. The agencies have also proposed the formation of a Joint Advisory Committee on Digital Assets, comprising 14 non-government members from industry, academia, and user groups [3]. The committee will provide nonbinding recommendations on rules, oversight, and regulatory harmonization.

The updated Responsible Financial Innovation Act 2025 also includes provisions to shield blockchain developers from being treated as financial institutions under existing securities laws, provided they do not exercise central control over systems or hold custody of user funds [3]. The act also extends bankruptcy protections to digital commodities, ensuring that customer claims now cover crypto and related assets alongside traditional securities [3]. These legislative developments, alongside the SEC and CFTC’s regulatory actions, indicate a coordinated shift toward a more structured and investor-protected digital asset ecosystem in the U.S.

Source:

[1] SEC and CFTC aim to harmonize crypto rules, boost US market leadership (https://cryptoslate.com/sec-and-cftc-aim-to-harmonize-crypto-rules-boost-us-market-leadership/)

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

[3] Crypto Regulation: US Senate Banking Updated Market Structure (https://bitcoinist.com/crypto-regulation-senate-updated-market-structure/)

[4] SEC and CFTC Propose Shift to 24/7 Financial Markets (https://cointelegraph.com/news/sec-cftc-statement-24-7-capital-markets)