SEC and CFTC Unify to Reclaim U.S. Crypto Leadership

The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have announced a joint initiative to coordinate efforts in the regulation of digital assets, marking a significant shift in the approach to crypto markets. This collaboration aims to provide regulatory clarity, promote innovation, and enhance market integrity while aligning with the recommendations of the President’s Working Group on Digital Asset Markets report. The two agencies have issued a staff statement clarifying that SEC- and CFTC-registered exchanges are not prohibited from facilitating the trading of certain spot crypto asset products [1]. This initiative forms part of the SEC’s Project Crypto and the CFTC’s Crypto Sprint, signaling a broader effort to streamline regulatory frameworks.

The joint effort highlights the convergence of securities and non-securities markets, with SEC Chairman Paul Atkins emphasizing the need for a regulatory environment that supports innovation and competition [2]. According to the agencies, fragmented oversight in the past had created uncertainty and driven certain crypto activities overseas. The new approach aims to harmonize rules, reduce regulatory gaps, and expand trading hours to align with the global, always-on economy [3]. This includes examining the potential for 24/7 trading in select asset classes and promoting greater participation in cross-market strategies by harmonizing margining requirements [4].

The joint roundtable on regulatory harmonization, scheduled for September 29, 2025, will focus on key areas such as portfolio margining, perpetual contracts, prediction markets, and decentralized finance (DeFi) protocols. A coordinated SEC-CFTC framework for portfolio margining could reduce capital inefficiencies by recognizing offsetting positions across product classes [5]. The agencies also plan to consider onshoring perpetual contracts and creating safe harbors for DeFi projects, allowing peer-to-peer trading without undermining investor protection standards [6].

This collaboration is expected to create a more predictable regulatory environment, potentially attracting more institutional and retail participants to U.S. markets. By leveraging exemptive authorities, the agencies aim to provide structured environments for innovation while ensuring robust risk controls. Acting CFTC Chairman Caroline D. Pham noted that the U.S. has long been a hub for financial innovation but has recently seen novel products move overseas due to legal uncertainty [7]. The new approach seeks to reverse this trend by harmonizing regulatory frameworks and encouraging the development of innovative products within the United States.

The joint initiative reflects a commitment to addressing the unique challenges of crypto markets, including jurisdictional overlaps and definitional constraints. By streamlining reporting and data standards and aligning capital frameworks, the SEC and CFTC aim to improve efficiency and lower barriers to entry for market participants. The agencies also plan to examine event contracts and perpetual contracts, which are currently more prevalent in offshore markets [8]. The ultimate goal is to establish a regulatory environment that supports both investor protection and market growth while ensuring that the U.S. remains competitive in the global financial landscape.

Source:

[1] 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)

[2] Joint Statement from the Chairman of the SEC and Acting Chairman of the CFTC (https://www.sec.gov/newsroom/speeches-statements/joint-statement-atkins-pham-090525)

[3] SEC and CFTC Launch Joint Effort to Harmonize Crypto and DeFi Regulation (https://www.mitrade.com/insights/news/live-news/article-3-1100550-20250906)

[5] 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/)