Although we are still awaiting much of the formal rulemaking and proposed rulemaking from federal securities and commodities regulators, last week’s memo is another sign that the SEC and CFTC are at least taking seriously the signal that these efforts are coming.
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the narrative
The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission formally agreed to work more closely to explain how they would oversee cryptocurrencies and other issues.
Why is it important
The agencies continue to signal that their past regulatory turf war is over and presented an explanation of how they will jointly approach rulemaking, a welcome sign for the crypto industry.
breaking it
The SEC and CFTC signed a memorandum of understanding last week aimed at combining their regulatory approaches to digital assets and other emerging technology sectors. According to the memorandum, the agencies will hold joint meetings periodically, share data and communicate their efforts to supervise the digital asset sector.
“More than aligning our rules, a harmonized framework also requires coordinating our responses to companies that operate within it, including those that have interpretive questions or request exemptions,” SEC Chairman Paul Atkins said in prepared remarks earlier this week.
The main suggestion here: that the SEC and CFTC coordinate how they define a digital asset as a security or not a security, in a way they didn’t two years ago.
One goal of the memo is for agencies to “clarify product definitions through joint interpretations and regulations,” it said.
The memo also said the agencies would update their regulatory frameworks for regulated companies in a number of areas, including clearing and margining, trading data and intermediaries, among others.
This harmonization effort may extend beyond cryptocurrencies: regulators are considering moving into an office building (that of the SEC), Bloomberg reported.
While the SEC and CFTC are making efforts to merge their approaches to the sector, agencies and broader industry participants are still waiting to see what happens with the market structure bill currently moving through the Senate. Senate Majority Leader John Thune told Punchbowl News that he did not expect the bill to pass the Senate before the “April period” earlier this week.
Congress is just a week away from its two-week Easter break, meaning that even if members of the Senate Banking Committee reach a deal to move the bill forward, sheer logistics mean it’s unlikely the Senate will have time to get to 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 negotiating a bill to fund the Department of Homeland Security, and President Donald Trump has said he wants Congress to pass the Safeguarding American Voters’ Eligibility Act (SAVE Act) before signing any other bills. However, none of these efforts seem likely to be approved immediately, the report suggests.
This week
- There are no hearings scheduled at press time. My colleague Jesse Hamilton and I will be at the Digital Camera 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 conversation on Telegram.
See you next week!
