Although we still await much of the formal rules and regulatory proposals from federal securities and commodities regulators, last week’s memo is another sign that the SEC and CFTC are at least serious about signaling that these efforts are coming.
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The story
The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission have officially agreed to work more closely together to outline how they would oversee crypto and other issues.
Why it matters
The agencies continue to signal that their previous regulatory turf war is over and have outlined how they will jointly approach rulemaking – a welcome sign for the crypto industry.
Break it down
The SEC and CFTC signed a memorandum of understanding last week to combine their regulatory approaches to digital assets and other emerging technology sectors. According to the memo, the agencies will regularly hold joint meetings, share data and otherwise communicate their efforts to oversee the digital assets sector.
“More than just aligning our rules, a harmonized framework also requires coordinating our responses to companies that operate within them, including those that have questions of interpretation or request relief,” SEC Chairman Paul Atkins said in prepared remarks earlier this week.
The main suggestion here: that the SEC and CFTC coordinate how they both define a digital asset as a security or non-security, in a way that they did not two years ago.
One of the goals of the memo is for agencies to “clarify product definitions through common interpretations and rules,” it says.
The memo also states that the agencies will update their regulatory frameworks for regulated companies in a number of areas, including clearing and margining, trade data and intermediaries, among others.
This harmonization effort could extend beyond just crypto: regulators are considering moving to a single office building (that of the SEC), Bloomberg reported.
While the SEC and CFTC work to merge their approaches to the industry, agencies and broader industry players are still waiting to see what happens with the market structure bill currently under consideration in the Senate. Senate Majority Leader John Thune told Punchbowl News he doesn’t expect the bill to pass the Senate until the “April period” earlier this week.
Congress is only a week away from its Easter recess, which means that even if members of the Senate Banking Committee reach an agreement to move the bill forward, simple logistics mean the Senate likely won’t have time to take up the bill in the immediate future. While I’m not sure how this will impact the Senate’s work on market structure, it’s also worth noting that lawmakers are still negotiating a bill to fund the Department of Homeland Security, and President Donald Trump has said he wants Congress to pass the Safeguard American Voter Eligibility Act (SAVE Act) before signing any other bills. However, none of these efforts appear likely to succeed immediately, reports suggest.
This week
- No hearings are scheduled as of press time. My colleague Jesse Hamilton and I will be at the Digital Chamber conference in Washington. Come say hello!
If you have any ideas or questions about what I should discuss next week or any other comments you would like to share, please feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social.
You can also join the group chat on Telegram.
See you next week!
