U.S. market regulators are merging operations in places where the functions of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) overlap, and building a crypto oversight framework is among the key goals of a written agreement released Wednesday.
Most of the MoU’s goals of combining oversight, product approval, and policy interpretation, as well as coordinating enforcement actions and providing dual registration, will impact the regulated majority of the crypto industry. But the agreement also specifically mentions “Providing a suitable regulatory framework for crypto assets and other emerging technologies” as its main objective.
SEC Chairman Paul Atkins had previewed the MOU in his remarks Tuesday, detailing how the agencies offer contact information to regulated companies so they can convene combined meetings to discuss policy issues and product applications.
“For decades, regulatory turf wars, duplicate agency registrations, and differing sets of regulations between the SEC and CFTC have stifled innovation and driven market participants to other jurisdictions,” Atkins said in a statement Wednesday. “By aligning regulatory definitions, coordinating oversight, and facilitating transparent and secure data sharing across agencies, we will ensure our rules and regulations provide the clarity market participants deserve.” »
The new agreement states that CFTC and SEC staff will meet regularly and share data on mutual interests. This includes enforcement actions, which have always been carried out independently, sometimes leaving a crypto company facing similar accusations from both agencies. If the two regulators overlap in an enforcement matter, they agree to “consult on potential charges and remedies, filing sequencing, litigation strategy and public communications.”
During the previous administration, other crypto positions of the two agencies sometimes directly contradicted each other, including how certain assets were placed in which category: securities or commodities.
Now their enthusiasm for friendly crypto rules is mutual and essentially unopposed, with the CFTC led by a single Republican chairman on an otherwise empty five-member commission and the SEC led by Atkins and two other Republicans, with the Democratic seats remaining vacant.
The agencies’ chairmen were both appointed by President Donald Trump, who came to office last year with new enthusiasm for crypto, stemming in part from his own growing business interests. Atkins and CFTC Chairman Mike Selig had worked for crypto clients before taking their jobs.
