The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are accelerating efforts to refine their cryptocurrency regulatory frameworks as congressional discussions over the broader crypto market-structure bill temporarily stall. The agencies are working to clarify key rules covering derivatives jurisdiction and digital-asset custody.
According to foreign media reports on the 31st (local time), the SEC and CFTC are working to clarify regulatory standards for crypto-related derivatives. Although the timeline for the CLARITY Act, the proposed crypto market-structure legislation, has become uncertain as Congress enters its summer recess, regulatory discussions at the agency level are continuing.
One key area under review is derivatives. In June, the SEC and CFTC began seeking public input on how to classify newly emerging financial products, including swaps and security-based swaps, and how far each agency’s supervisory authority should extend.
Former regulators have warned that excessive or overlapping regulations could weaken the competitiveness of U.S. markets. Chris Giancarlo, former CFTC chairman, and Steven Wallman, former SEC commissioner, among others, argued in recently submitted comments that products with similar risks should be subject to similar regulatory standards and that unnecessary regulatory overlap should be reduced.
The regulatory treatment of products such as crypto perpetual futures is becoming a particularly important issue, as a significant share of trading demand is concentrated in overseas markets. The former officials warned that excessive regulation could drive liquidity overseas rather than eliminate the underlying trading activity.
The SEC is also moving separately to revise digital-asset custody rules. It recently submitted proposed amendments to custody regulations for investment advisers and investment companies to the White House Office of Information and Regulatory Affairs (OIRA) for review.
The goal is to provide clearer standards under which SEC-regulated financial institutions can custody digital assets while complying with federal securities laws. Specific details of the proposed revisions have not yet been disclosed.