Why Can't We Be Friends? The SEC and CFTC Vow More Cooperation

Key Initiatives and Areas of Focus

Under the Trump administration, the agencies have seemed to move on from prior "turf wars" over crypto regulation in particular, following the call for greater interagency cooperation and joint rulemaking from the White House's recent digital asset policy report and the pending Digital Asset Market Clarity Act. In the Statement, the SEC and the CFTC announced several joint initiatives and potential regulatory changes, including:

• A joint roundtable on regulatory harmonization. A roundtable is scheduled for September 29, 2025, to discuss harmonization priorities and gather input from market participants and stakeholders.
• Expanding trading hours. The agencies will consider the feasibility of extending trading hours for certain asset classes to better align U.S. markets with the reality of the global economy, while maintaining investor protections.
• Event and perpetual contracts. The statement contemplates providing regulatory clarity for event contracts (prediction markets) and exploring the onshoring of perpetual contracts (derivatives without expiry dates) currently prevalent in offshore crypto markets. The agencies aim to enable these products to trade on U.S. platforms under robust risk management standards. Earlier this year, the CFTC issued a Request for Comment seeking public input on the risk and characteristics of perpetual derivatives, and, in fact, the CFTC raised no objection to the first two perpetual futures contracts (based on ETH and BTC, respectively) to trade in the United States.
• Portfolio margining. The SEC and the CFTC are considering a coordinated framework for portfolio margining to reduce capital inefficiencies. Harmonized margin requirements could allow market participants to net exposures across product classes, lowering costs and freeing up balance sheet capacity for both institutional and retail participants.
• Innovation exemptions and decentralized finance ("DeFi"). Both agencies reaffirm their willingness to consider "innovation exemptions" or safe harbors for peer-to-peer trading of spot crypto assets and derivatives over DeFi protocols. These exemptions would provide regulatory flexibility for new business models while longer-term rulemaking is developed.

Policy Objectives

The Statement underscores the agencies' shared objectives to reduce regulatory uncertainty, promote market competitiveness and investor protection, encourage the return of innovative products and trading activity to U.S. markets (as exemplified by the recent CFTC Advisory described in our Alert, "CFTC Issues Advisory to Clarify FBOT Registration Framework for Non-U.S. Crypto Exchanges to Access U.S.-based Participants"), and strengthen U.S. leadership in financial innovation.