U.S. financial regulators are moving to align oversight of emerging technologies, including various types of cryptocurrency, through a new cooperation agreement between the country’s two main market watchdogs.
The U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission announced the agreement on Wednesday.
The agencies signed a Memorandum of Understanding designed to coordinate oversight while encouraging lawful innovation across financial markets and digital assets. Additionally, the agreement aims to reduce regulatory friction that officials say has slowed technological development in U.S. markets.
SEC Chairman Paul Atkins said overlapping regulations and bureaucratic disputes have historically discouraged companies from launching new financial products in the United States. He said the agencies now want to remove unnecessary barriers that pushed entrepreneurs and investors toward overseas jurisdictions.
Meanwhile, the regulators emphasized that closer coordination should also strengthen investor protection and market integrity. The agencies said the memorandum will guide how they collaborate on policies covering crypto assets and other emerging technologies.
However, the agreement itself does not create new laws or binding rules governing the digital asset industry. Instead, it establishes a framework for the two regulators to work together when developing future policies.
Furthermore, both agencies signaled they want to design a regulatory structure tailored specifically for digital assets rather than forcing them into older frameworks. Officials said the approach should help regulators respond more effectively to rapid technological changes in finance.
Consequently, the agencies expect improved cooperation when reviewing proposals for new crypto-related financial products. The memorandum also calls for ongoing information sharing between the SEC and CFTC on enforcement, rulemaking and market developments.
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Agreement represents significant regulatory change
In addition, the regulators pledged to coordinate efforts aimed at removing obstacles that prevent legitimate crypto products from entering U.S. markets. CFTC Chairman Michael Selig said U.S. financial markets remain globally influential because they adapt to investor needs and technological change.
He said regulators must modernize oversight so financial infrastructure evolves alongside new trading technologies and digital asset platforms. Subsequently, both agencies plan to collaborate on policy discussions shaping how crypto assets fit within the broader U.S. financial system.
The regulators also intend to engage industry participants while drafting policies affecting emerging digital markets and financial innovation. Officials said the agreement reflects a broader push to align regulatory frameworks as digital finance becomes increasingly integrated with traditional markets.
For years, disagreement between the SEC and CFTC created uncertainty over how the United States should regulate digital assets. The conflict largely centered on whether cryptocurrencies qualify as securities or commodities under federal law.
The SEC generally argues many crypto tokens function as securities because investors purchase them expecting profits from project developers. However, the CFTC has often treated major cryptocurrencies such as Bitcoin as commodities similar to gold or oil.
Consequently, companies frequently faced uncertainty about which regulator controlled their products and trading platforms. Meanwhile, the SEC launched several high-profile enforcement actions against crypto firms during the past decade.
In 2023, the agency sued Coinbase Global Inc. (NASDAQ: COIN), alleging the exchange operated an unregistered securities marketplace. The SEC also filed a major case against Ripple Labs, arguing its XRP token constituted an unregistered securities offering.
However, a federal judge later ruled that some XRP sales on public exchanges did not qualify as securities transactions.
