US market regulators are merging their operations where the duties of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) overlap, and the creation of a crypto oversight framework is listed among the main objectives of a written agreement released on Wednesday.
Most of the objectives of the MoU in combining supervision, product approval and policy interpretations as well as coordination of enforcement actions and providing dual registration will impact the regulated majority of the crypto sector. But the agreement specifically lists “providing an appropriate regulatory framework for crypto assets and other emerging technologies” as a top goal.
SEC Chairman Paul Atkins previewed the MOU in remarks Tuesday, detailing how the agencies are offering contact information for regulated firms to convene joint meetings to discuss policy matters and product applications.
“For decades, regulatory turf wars, duplicative agency registrations, and different 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 that our rules and regulations provide market participants the clarity they 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 historically been pursued independently, sometimes leading to a crypto firm facing the same charges by both agencies. If the two regulators overlap in an enforcement case, they are agreeing on “potential charges and relief, sequencing of filings, litigation strategy and providing public communications.”
During previous administrations, other crypto positions from both agencies sometimes directly contradicted each other, including how certain assets were being placed in which bucket: securities or commodities.
Now, their enthusiasm for friendlier crypto regulations is mutual and essentially unopposed, given the CFTC, run by the only Republican chair on the otherwise vacant five-member commission, and the SEC, led by Atkins and two other Republicans, the Democrat seats have been kept vacant.
The chairmen of both agencies were appointed by President Donald Trump, who came to office last year with a new enthusiasm for crypto, spurred by his own growing business interests. Atkins and CFTC Chairman Mike Selig both worked for crypto clients before taking their jobs.