The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have signed a formal cooperation agreement to end the long-standing conflict of jurisdiction over the supervision of crypto asset markets. This new agreement is a structural solution, especially to prevent crypto companies from being caught between different regulations.
Joint Audit and Regulatory Compliance
Within the scope of the agreement made between the two institutions; An infrastructure was created that enables a common classification of crypto assets, coordinated audit processes, joint policy studies, cooperation in practice, joint regulatory inspections and data sharing. Thus, the need for companies serving in the market to respond to the contradictory demands of two different institutions at the same time has been eliminated.
The SEC and CFTC also launched a Joint Compliance Initiative to jointly address product classification, reporting standards, collateral and clearing systems, and market surveillance. Thanks to these initiatives, companies can receive opinions simultaneously from both the SEC and CFTC through the joint website developed for new applications.
Impact on Crypto Exchanges, Tokens and Custodians
One of the biggest advantages for exchanges has been the achievement of legal clarity regarding token listings. Thanks to the common crypto asset taxonomy, decisions made about whether a token is a security or a commodity are valid before both institutions.
Institutions providing custody services and companies audited by both institutions can now benefit from a single supervision line without going through separate audits. Companies planning to issue tokens to the USA also have the opportunity to act within a predictable framework. It is aimed to eliminate the uncertainty regarding which institution will have legal authority, especially in terms of stablecoin projects.
In his statement at the beginning of the year, SEC Chairman Paul Atkins said, “Market participants have long had to move between unclear regulatory boundaries. This development will strengthen the comprehensive compliance efforts carried out to ensure innovation takes root in the United States.”
Legal Process and Future Steps
The agreement came into effect independently of the bill called CLARITY, which passed the House of Representatives and gave CFTC priority in crypto spot markets. However, the bill is still pending in the Senate due to ongoing disputes between the financial sector and the crypto industry over stablecoin returns and tokenized assets.
If the CLARITY law passes the Senate, the agreement signed between the parties will officially become a law. However, even if the bill does not advance, this cooperation continues to provide common regulation and operational convenience for companies.
The joint website launched within the scope of the framework aims to facilitate the application process for companies that must obtain a license from both institutions. It is anticipated that the first coordinated sanctions, which are expected to be implemented in a short time, will be a test to show whether the institutions are truly acting in cooperation.
CFTC Chairman Mike Selig said in his social media post, “Territory conflicts between us and the SEC are now over. This agreement strengthens our common compliance goals.”
