Senate Drafts Split Crypto Oversight Between CFTC and SEC Amid Shutdown End

President Donald Trump on Monday endorsed a bipartisan Senate deal to end the 41-day government shutdown, signaling his intent to sign the legislation and restore operations to federal agencies, including the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) according to Bloomberg. The agreement, which cleared a key procedural vote Sunday night with 60-40 support, will reinstate funding for agencies through January 30, reverse mass layoffs, and address a backlog of regulatory actions, including crypto-related rulemaking.

The shutdown's resolution has immediate implications for the crypto industry. With the CFTC and SEC resuming normal operations, regulators can now advance a pilot program for leveraged crypto trading in the U.S., slated to begin early next year. Acting CFTC Chair Caroline Pham has already engaged with exchanges like Kraken and Polymarket to discuss product launches, citing the agency's existing legal authority to oversee digital assets. The CFTC's renewed activity coincides with a broader push to clarify crypto regulations, including the bipartisan CLARITY Act, which seeks to harmonize oversight across federal agencies.

Meanwhile, the SEC and CFTC's long-standing jurisdictional dispute over digital assets is nearing a legislative resolution. Two competing Senate drafts-proposed by the Agriculture and Banking Committees-aim to define regulatory boundaries. The Agriculture Committee's plan would expand CFTC authority over "digital commodities" and their spot markets, requiring exchanges to adopt capital and custody rules akin to traditional commodity markets. Conversely, the Banking Committee's framework grants the SEC oversight of "ancillary assets," a category encompassing tokens transitioning from securities to commodities, such as Ethereum. These proposals could force U.S. crypto platforms to navigate dual registration requirements and stricter compliance measures.

The regulatory shifts gain urgency as Trump's nominee for CFTC chair, Mike Selig-currently leading the SEC's Crypto Task Force, preps for a Senate confirmation hearing on November 19. Selig's confirmation would position him to oversee the CFTC during a critical period, as Congress moves to finalize legislation that could cement the agency's role in crypto spot trading.

Market participants are also monitoring the CFTC's pilot program for leveraged crypto trading, which could attract institutional investors and reshape market liquidity. Pham's recent collaboration with SEC officials -marking an end to their "turf war"-suggests a rare alignment in regulatory priorities. However, challenges remain, including defining decentralization thresholds and resolving overlapping jurisdictions, particularly for decentralized finance (DeFi) platforms.

The shutdown's end also highlights Trump's focus on rewarding federal workers, notably air traffic controllers who faced pay delays. He proposed $10,000 bonuses for those who worked without pay during the crisis, while threatening penalties for those who took sick leave. Such measures aim to restore public confidence in federal operations, though critics argue they do little to address systemic funding gaps.

As the Senate finalizes the deal and the House prepares to vote, the crypto industry braces for a regulatory overhaul that could standardize market practices and clarify investor protections. With both chambers moving toward year-end deadlines, the outcome of these efforts will likely shape the U.S. digital asset landscape for years to come.