While we’re still waiting on a lot of the formal rulemaking and proposed rulemaking from the 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 narrative
The US Securities and Exchange Commission and the Commodity Futures Trading Commission formally agreed to work more closely together to explain how they would monitor crypto and other issues.
Why it matters
The agencies continue to signal that their previous regulatory war is over, and provided an explanation of how they will jointly approach the regulations – a welcome sign for the crypto industry.
To break it down
The SEC and CFTC signed a memorandum of understanding last week aimed at combining their regulatory approaches to the digital asset and other emerging technology sectors. According to the memorandum, the agencies will regularly hold joint meetings, share data and otherwise communicate their efforts to oversee the digital asset sector.
“More than aligning our rules, a harmonized framework also requires coordinating our responses to the firms that operate within it, including those that have questions of interpretation or request an exemption,” SEC Chairman Paul Atkins said in prepared remarks earlier this week.
The main proposition here: That the SEC and CFTC will coordinate how they both define a digital asset as a security or a non-security, in a way they didn’t two years ago.
One of the goals of the memo is for the agencies to “clarify product definitions through common interpretations and rules,” it said.
The memo also said the agencies would update their regulatory framework for regulated firms across a number of areas, including clearing and margin, trade data and intermediaries, among others.
This harmonization effort may extend beyond just crypto — the regulators are considering moving into an office building (the SECs), Bloomberg reported.
While the SEC and CFTC are making efforts to merge their approaches to the sector, the agencies and broader industry participants are still waiting to see what happens with the market structure bill currently working its way through the Senate. Senate Majority Leader John Thune told Punchbowl News he did not expect the bill to work its way through the Senate until the “April period” earlier this week.
Congress is just a week out from its two-week Easter recess, which means that even if Senate Banking Committee members agree to move the bill forward, sheer logistics mean the Senate is unlikely to have time to reach the bill in the immediate future. While I’m not sure how much this will affect the Senate’s work on market structure, it’s also worth noting that lawmakers are still debating 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 another bill. Neither of these efforts appear to be panning out immediately, reporting suggests.
This week
- There are no hearings scheduled at press time. My colleague Jesse Hamilton and I will be at the Digital Chamber conference in Washington. Come and say hi!
If you have thoughts or questions about what I’ll be discussing next week or any feedback you’d like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social.
You can also join the group conversation on Telegram.
See you next week!
