The US market regulators are merging their activities in the places where the duties of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) overlap, and building a crypto surveillance framework is listed among the core objectives of a written agreement released on Wednesday.
Most of the objectives of the MoU, combining oversight, product approvals and policy interpretations, plus coordinating enforcement actions and providing for dual registration, will affect the regulated majority of the crypto sector. But the agreement also specifically listed “Providing an appropriate regulatory framework for crypto-assets and other emerging technologies” as a top goal.
SEC Chairman Paul Atkins previewed the MOU in Tuesday’s remarks, detailing how the agencies will offer contact information for regulated firms to convene joint meetings to discuss policy issues and product applications.
“For decades, regulatory turf wars, duplicative agency registrations and differing sets of rules between the SEC and CFTC have stifled innovation and pushed market participants to other jurisdictions,” Atkins said in a statement Wednesday. “By aligning regulatory definitions, coordinating oversight, and facilitating seamless, secure data sharing between agencies, we will ensure our rules and regulations provide the clarity market participants deserve.”
The new agreement says CFTC and SEC staff will meet regularly and share data of mutual interest. That includes enforcement actions that have historically been pursued independently, sometimes leaving a crypto firm facing similar charges from both agencies. If the two regulators overlap in an enforcement case, they agree to “confer on potential charges and relief, order of cases, litigation strategy and public communications.”
Under the previous administration, the two agencies’ other crypto positions sometimes directly contradicted each other, including how certain assets were placed in which bucket: securities or commodities.
Now, their enthusiasm for friendly crypto regulations is mutual and essentially unopposed, with the CFTC headed by a lone Republican chairman on an otherwise empty five-member commission and the SEC led by Atkins and two other Republicans, with Democrats’ seats held vacant.
The heads of the agencies were both appointed by President Donald Trump, who took office last year with a newfound enthusiasm for crypto, stemming in part from his own growing business interests. Both Atkins and CFTC Chairman Mike Selig had worked for crypto clients before taking their jobs.
