U.S. financial regulators on Thursday afternoon moved to present a unified front on digital asset oversight, as the heads of the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) convened a joint public “harmonization” meeting aimed at showing how the two bodies can work together on crypto regulation. In the same session, CFTC’s new chair Mike Selig said it’s “time for clear rules” regarding prediction markets, and shared plans for clearing the way “lawful innovation” in that space.
The event was held at CFTC headquarters and was hosted by former Fox Business journalist Eleanor Terrett, co-founder of Crypto in America, a media platform focused on U.S. crypto regulation and policy.
Today’s meeting comes at a pivotal moment for U.S. crypto policy, as regulators and policymakers attempt to bring clarity to crypto oversight. Lawmakers are actively advancing crypto market-structure proposals in Congress, while the White House is expected to step in next week to help broker a compromise between banks and crypto firms amid unresolved disputes over how digital assets should be regulated. The push comes as the SEC has also issued new guidance clarifying its position on tokenized securities.
Project Crypto becomes shared SEC/CFTC initiative
SEC chair Paul Atkins opened Thursday’s joint SEC/CFTC “harmonization” meeting by signaling that Project Crypto, the SEC’s effort to modernize how U.S. securities rules apply to digital assets, is no longer just an SEC initiative, but a coordinated push from both regulators as Congress inches closer to passing crypto market-structure legislation.
“Congress has never been closer to sending bipartisan market structure legislation to President Trump’s desk,” Atkins said, while stressing that legislation alone will not provide the certainty markets are looking for. “That is why I’m delighted to work with (the CFTC chairman) to implement clear and principled rules of the road for crypto asset markets.”
Atkins framed the initiative as a response to how markets now function, not how regulations were originally written. Trading, clearing, custody, and risk management increasingly span asset classes and technologies, he said, making fragmented regulation a source of confusion rather than protection for investors.
“For decades, we have compelled market participants to operate within a maze of overlapping and often inconsistent regulatory frameworks that reflect historical boundaries more than modern realities,” Atkins said. “That model is no longer sustainable.”
In the “fireside chat” with Terrett and Selig that followed each chairman’s opening remarks, Atkins described the efforts with the CFTC as “coordination, not consolidation,” pushing back on the idea that harmonization implies a merger of agencies.
“This is a problem of overlapping jurisdiction,” he said. “We can solve that by collaboration.”
The goal, Atkins said, is to prevent regulatory uncertainty from leaving new products in limbo between agencies. He warned that unclear jurisdiction can stifle innovation and push activity offshore.
“Uncertainty leaves firms stuck in what I call the no man’s land between the two fortresses, SEC and CFTC,” Atkins said. “There are dead products strewn around that no man’s land. People go abroad.”
Selig details CFTC’s crypto priorities
In some of his first major public remarks as CFTC chair, Mike Selig used Thursday’s event to lay out an expansive agenda for how the agency plans to handle crypto markets, on-chain infrastructure, and product and market innovation, starting with jurisdictional clarity.
“The industry has struggled to determine whether it is subject to the SEC, the CFTC, or both,” Selig said. “It is incumbent on us to draw a bright line.”
Selig said he agrees with Atkins that “most crypto assets trading today are not securities,” and pointed to a shared asset classification system as the logical starting point. He said that while Congress works to finalize legislation, he has directed CFTC staff to work with SEC staff on possible “joint codification” of this framework that would treat digital commodities, digital collectibles, and digital tools as non-securities, even when sold as part of an investment contract.
Selig also said the CFTC is already looking at how existing rules apply to retail crypto trading and whether new frameworks are needed as those markets evolve.
“We will also take steps on intermediated trading, including clarifying when leveraged, margined, or financed retail commodity transactions in crypto assets may be offered off-exchange under an actual delivery exception, and drafting rules for (Designated Contract Markets) that choose to offer these transactions, including exploring a new DCM category tailored to retail leveraged crypto trading,” he said.
CFTC chair outlines regulatory reset for prediction markets
Selig closed his opening remarks by directly addressing prediction markets, which fall under the CFTC’s jurisdiction.
“On prediction markets and event contracts, these markets have been within the CFTC’s regulatory perimeter for more than two decades,” Selig said. “It is time for clear rules,” he added, saying that the agency supports lawful innovation and sees event contract markets as an important part of the broader financial system.
As an initial step, Selig said he has directed staff to withdraw the CFTC’s 2024 proposal that would have prohibited event contracts tied to sports, elections and political outcomes, as well as a 2025 staff advisory that cautioned registrants about offering sports prediction markets. That notice, which warned operators about ongoing state-level action aimed at prohibiting sports event contracts, advised platforms to have contingency plans in place and was recently referenced in a Massachusetts ruling that would force Kalshi to restrict those markets in the state.
Looking ahead, Selig said the agency will move forward with a new event contracts rulemaking process, saying the current framework has been difficult to apply and has not served market participants well. He also said the commission will reassess its posture in pending federal court cases involving prediction market platforms where CFTC jurisdiction is at issue, suggesting the agency could become more involved.
The Coalition for Prediction Markets applauded Selig’s comments in a post on X, writing that “by withdrawing uncertain guidance around sports-event contracts and committing to undertake comprehensive rulemaking, the Commission takes a key step to foster market clarity, responsible innovation, and trust in American markets.”
Congress advances crypto framework prior to meeting
On Thursday, just prior to the harmonization meeting, the Senate Agriculture Committee advanced its crypto market structure proposal, known as the Digital Commodity Intermediaries Act, approving the bill on a narrow party-line vote. As one component of the broader crypto regulatory framework under consideration in Congress, the bill would give the CFTC primary authority over spot markets for digital commodities while preserving the SEC’s role over securities, and would require coordination on transactions involving both asset types.
The Agriculture bill does not address the full range of SEC-related issues, which were expected to move through the Senate Banking Committee. That effort recently stalled following industry pushback, including Coinbase’s decision to withdraw support, leaving the Senate without a unified market structure package for now.
Regulators, meanwhile, have continued to clarify their positions ahead of legislation. One day before the harmonization meeting, SEC staff issued guidance reaffirming that tokenized stocks, bonds, and other traditional financial instruments remain securities under U.S. law, even when issued or recorded on a blockchain. The statement reinforced the SEC’s jurisdiction over tokenized securities while leaving room for the CFTC to oversee non-security digital assets.
Despite the momentum, the legislative path remains somewhat unclear. President Donald Trump is reportedly hosting a closed-door meeting next week with banking and crypto industry representatives to discuss the stalled Senate process, with stablecoin provisions and concerns that crypto products could draw money away from banks expected to be key topics.
Regardless of how quickly Congress acts, Thursday’s meeting made clear that the SEC and CFTC are preparing to implement any final legislation in a coordinated way.
