The US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) signed a Memorandum of Understanding (MOU) on March 11, formalizing their commitment to coordinate on digital asset regulation and end years of jurisdictional rivalry.
The agreement marks the most concrete step yet under the agencies’ joint Project Crypto initiative, launched in January 2026, and comes as the Digital Asset Market Clarity Act remains stalled in the Senate.
What the MOU Covers
The MOU establishes a framework across six priority areas. These include clarifying product definitions, modernizing clearing and collateral rules, and reducing frictions for dually registered entities. It also covers building a crypto-specific regulatory framework, streamlining reporting, and coordinating cross-market examinations and enforcement.
It also establishes operational procedures, including regular joint meetings, data-sharing protocols, advance notifications of jurisdictional issues, and cross-training of staff.
“For decades, regulatory turf wars, duplicative agency registrations, and different sets of regulations between the SEC and CFTC have stifled innovation and pushed market participants to other jurisdictions,” SEC Chairman Paul Atkins said.
A Joint Harmonization Initiative will operationalize the MOU’s goals, co-led by SEC’s Robert Teply and CFTC’s Meghan Tente.
Selig Previews CFTC’s Crypto Agenda
Speaking at the same FIA conference one day before the MOU signing, CFTC Chairman Michael Selig previewed the agency’s side of the harmonization effort. He framed his regulatory philosophy around a “minimum effective dose,” warning that excessive rules push innovation offshore.
On crypto specifically, Selig confirmed directing staff to draft guidance on whether non-custodial software developers — including those building wallets and DeFi apps — trigger CFTC registration requirements. He also ordered staff to clarify rules around leveraged retail crypto transactions and the classification of perpetual futures.
From Turf War to Joint Framework
The MOU culminates a policy shift that accelerated under Trump-appointed leadership. In September 2025, the agencies declared their jurisdictional standoff over. In January 2026, CFTC Chairman Michael Selig and Atkins jointly launched Project Crypto, with Selig endorsing Atkins’ view that most crypto assets currently trading are not securities.
Reports emerged on March 7 that the agencies are discussing co-locating in the same Washington building complex by 2027. At the FIA conference, Selig confirmed he and Atkins meet regularly and have ended inter-agency rivalry.
Atkins introduced “substituted compliance” at the same event. Under this approach, a firm registered with both agencies would need to meet only one set of similar rules. He also announced a joint consultation platform for firms to engage both regulators before launching products.
Why Now: CLARITY Act Stalled
The Digital Asset Market Clarity Act passed the House in July 2025 by a 294-134 vote, but remains stuck in the Senate Banking Committee over stablecoin yield provisions. Banks have opposed allowing crypto platforms to offer rewards on stablecoin holdings, and a White House compromise proposed in February was rejected by the banking lobby.
Senators are working on new compromise language, but the path to a markup remains uncertain. The Iran war and Trump’s insistence on voter-ID legislation before signing other bills have further compressed the Senate calendar.
By signing the MOU now, the SEC and CFTC are building operational infrastructure for coordinated crypto regulation regardless of whether Congress delivers statutory backing this year. The MOU serves as a bridge — coordinating now while awaiting legislation to make it permanent.
What It Means for Crypto Markets
Dually registered exchanges should see reduced compliance burdens through coordinated examinations and substituted compliance. The shared crypto-asset taxonomy — distinguishing between securities, digital commodities, collectibles, and utility tokens — could resolve longstanding classification disputes for assets like Ethereum.
On enforcement, Selig said the CFTC will focus on policing fraud rather than setting policy through enforcement — a pointed contrast with the Gensler era.
Without the CLARITY Act’s statutory backing, however, these arrangements remain subject to future leadership changes. The agencies have invited public input through the SEC’s Harmonization Initiative page.
Selig’s FIA speech also covered a broader deregulatory agenda beyond crypto, including designating AI compute as a “new digital commodity,” repatriating critical minerals trading, dismantling the CFTC’s climate risk unit, and drafting new guidance for prediction-market event contracts.
