SEC and CFTC End Years-Long Crypto Jurisdiction Battle, Launch Joint Regulatory Framework and “Project Crypto” Coordination

U.S. financial regulators formalize coordinated oversight for digital assets 

TL;DR

• U.S. regulators signed a memorandum to coordinate crypto oversight, ending years of jurisdiction disputes between the SEC and CFTC.
• The agencies launched a joint regulatory initiative called Project Crypto to clarify digital asset classifications and streamline oversight.
• Crypto derivatives dominate global markets, with perpetual futures alone generating between $150 billion and $200 billion in daily trading activity.

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Federal financial regulators in the United States have formally agreed to coordinate their oversight of cryptocurrency markets, ending years of regulatory conflict between the Securities and Exchange Commission and the Commodity Futures Trading Commission through a new memorandum of understanding announced on March 11, 2026. The agreement establishes a framework for joint supervision of digital asset markets and emerging financial infrastructure tied to blockchain technology, while also aligning regulatory enforcement, policy development, and examination procedures between the two agencies responsible for securities and commodities markets.

The memorandum formalizes what regulators described as a new collaborative approach after years of disagreements over whether cryptocurrencies should fall under securities law or commodities regulation. Crypto companies and trading platforms previously faced overlapping regulatory demands and uncertainty about which agency held primary authority over digital asset activities. Officials said the new structure is intended to provide consistent regulatory oversight for crypto markets while maintaining investor protection and market integrity.

Coordination between the two regulators will be implemented through a joint harmonization initiative designed to align rulemaking, regulatory monitoring, enforcement actions, and examination practices. Robert Teply is leading the effort for the SEC, while Meghan Tente is coordinating the initiative for the CFTC as the agencies begin implementing the cooperation framework. The plan also includes shared regulatory data access, cross-market surveillance, and coordination of investigations involving crypto trading venues and financial intermediaries.

Six operational priorities are outlined under the initiative, including joint interpretation of digital asset classifications, modernization of clearing and collateral rules for crypto markets, reduction of compliance friction for platforms regulated by both agencies, and the creation of regulatory frameworks for emerging technologies such as tokenized financial instruments. Regulators also plan to coordinate reporting requirements for trading activity and conduct joint market risk analysis alongside shared economic studies tied to digital asset markets.

SEC Chair Paul Atkins described the agreement as a structural shift in regulatory coordination, saying the memorandum “will serve as a roadmap for a new era of harmonization between the agencies.” Atkins also referenced the historically adversarial relationship between the regulators, saying the agencies had previously engaged in regulatory “fisticuffs” when disputes over jurisdiction surfaced in digital asset cases.

CFTC Chair Michael Selig said regulators intend to eliminate overlapping rules while preserving market protections, describing the cooperation as part of a broader modernization effort. Selig said the agencies would pursue what officials called “the minimum effective dose of regulation” while continuing oversight of trading platforms and digital asset intermediaries operating in U.S. markets.

The joint regulatory approach builds on a broader initiative known as Project Crypto, which was relaunched in January 2026 as a coordinated regulatory effort between the SEC and CFTC. The program focuses on creating clear definitions for digital assets and developing regulatory standards covering crypto market infrastructure, including exchanges, derivatives markets, and blockchain-based financial products.

Project Crypto organizes regulatory development around three pillars that address digital asset classification, coordination of federal oversight, and the preservation of permissionless innovation in decentralized financial systems. Officials working on the project are drafting a taxonomy to categorize blockchain assets into several groups including digital commodities, digital asset securities, digital collectibles, and utility tokens described as digital tools.

The agencies are evaluating whether those classifications should be implemented through joint regulatory interpretations while Congress continues debating digital asset legislation such as the CLARITY Act and the Digital Commodity Intermediaries Act. Regulators said interim coordination could provide industry guidance while lawmakers determine statutory boundaries between securities and commodities oversight for cryptocurrencies.

Regulatory officials are also examining rules governing crypto derivatives markets, where trading activity has grown significantly in recent years. Global cryptocurrency derivatives trading includes approximately $30 billion to $50 billion in daily activity tied to traditional futures contracts and another $10 billion to $20 billion in options trading tied to digital assets.

Perpetual futures contracts dominate the sector, accounting for roughly 75% of global crypto derivatives trading activity. These contracts, which do not expire and instead rely on funding payments between traders to maintain price alignment with spot markets, generate between $150 billion and $200 billion in daily trading volume across international exchanges.

Most perpetual futures trading currently occurs on platforms operating outside U.S. regulatory frameworks. Regulators said the coordinated oversight framework could allow the development of regulated derivatives products within the United States, including markets where leveraged and margined digital asset trading is permitted under federal supervision.

Officials are also considering regulatory structures for prediction markets, platforms where participants trade contracts tied to future outcomes such as elections or economic indicators. Economists studying these markets have described them as information-aggregation systems where prices can incorporate distributed knowledge from traders forecasting future events.

Regulators noted that prediction markets currently exist in a legal gray area because they can resemble financial derivatives while also sharing characteristics with wagering systems. CFTC officials said the agency is evaluating regulatory approaches that would treat prediction contracts as financial instruments while applying market integrity protections.

Discussions between regulators also include potential safe-harbor provisions for decentralized finance software developers working on blockchain-based financial infrastructure. Officials acknowledged that decentralized exchanges, non-custodial wallets, and smart-contract protocols operate differently from traditional financial intermediaries.

Regulators involved in the discussions said decentralized financial systems challenge the assumption that financial markets must rely on centralized intermediaries. Federal agencies are examining whether certain decentralized technologies could qualify for exemptions or modified regulatory frameworks under existing financial laws.

This article has been refined and enhanced by ChatGPT.