SEC-CFTC Joint Staff Statement: A New Horizon for Spot Crypto Trading

KEY TAKEAWAYS

In September 2025, the United States Securities and Exchange Commission (“SEC“) and Commodity Futures Trading Commission (“CFTC“) issued a coordinated joint staff statement clarifying that certain spot crypto asset products may be listed on SEC-registered national securities exchanges, CFTC-registered Designated Contract Markets (“DCMs”), and foreign boards of trade under existing law.
Leveraged, margined, or financed retail spot crypto transactions may fall within Section 2(c)(2)(D) of the Commodity Exchange Act (“CEA”) and be treated similarly to futures, depending on structure and statutory conditions.
The agencies have initiated broader harmonization efforts through Project Crypto and Crypto Sprint, including roundtables addressing perpetual contracts, portfolio margining, DeFi, and 24/7 markets.
While the guidance provides interpretive clarity, it does not constitute rulemaking; long-term certainty for spot crypto markets will likely require Congressional legislation.

SEPTEMBER 2, 2025: JOINT STAFF STATEMENTS

On September 2, 2025, the SEC’s Division of Trading and Markets and the CFTC’s Divisions of Market Oversight and Clearing & Risk issued a coordinated joint staff statement addressing the trading of certain spot crypto asset products in the United States.¹ The statement was issued under the SEC’s “Project Crypto” and the CFTC’s “Crypto Sprint” initiatives/divisions respectively.

The Divisions clarified that existing law does not prohibit:

SEC-registered national securities exchanges,
CFTC-registered DCMs, or
foreign boards of trade

from listing and facilitating trading of certain spot crypto asset products, provided that applicable statutory and regulatory requirements are satisfied.

The statement expressly emphasized that it reflects staff interpretation and does not amend statutory obligations or constitute new rulemaking.

Policy Context: The President’s Working Group Report

The joint statement followed the July 2025 White House report titled Strengthening American Leadership in Digital Financial Technology, issued through the President’s Working Group on Digital Asset Markets (“PWG”).²

The PWG Report directed agencies to utilize existing statutory authorities to provide regulatory clarity and support blockchain innovation within the United States. Acting CFTC Chairman Caroline Pham noted that regulatory uncertainty had contributed to offshore migration of digital asset activity and characterized the initiatives as an opportunity to restore competitiveness.³ SEC Chairman Paul Atkins described the statement as facilitating innovation within established regulatory frameworks.⁴

Regulatory Context: Section 2(c)(2)(D) of the Commodity Exchange Act

Section 2(c)(2)(D) of the Commodity Exchange Act, 7 U.S.C. § 2(c)(2)(D), governs leveraged, margined, or financed retail commodity transactions. As a general rule, such transactions must occur on a CFTC-registered exchange, unless a statutory exception is applicable.

The joint staff statement clarified that leveraged retail spot crypto transactions may be treated “as if” they are futures contracts where statutory conditions are met.

Importantly, the provision contains an exception for transactions listed on SEC-registered national securities exchanges. The Divisions clarified that this exception permits certain products to be listed within the SEC framework without triggering the CFTC venue requirement, thereby acknowledging that both regulatory regimes may accommodate certain spot crypto asset products depending on structure.

This interpretation is central to the framework: regulatory treatment depends on product architecture, margin mechanics, and venue structure.

Operational Considerations Highlighted by the Agencies

The joint statement and related communications addressed several operational issues.

Custody, Clearing, and Settlement

Clearinghouses may partner with custodians to maintain customer accounts under existing rules. SEC-registered clearing agencies and CFTC-registered DCOs were invited to consult with staff regarding participation models.

Market Surveillance and Data Sharing

The agencies emphasized reference pricing venues, cross-market data-sharing arrangements, and coordinated surveillance to promote fair and orderly markets.

Fair and Orderly Markets

Registered venues are expected to adhere to principles of transparency, competition, and efficient execution when facilitating spot crypto products.

SEPTEMBER 5, 2025: REGULATORY HARMONIZATION

On September 5, 2025, SEC Chairman Atkins and CFTC Acting Chairman Pham issued a supplemental joint statement addressing regulatory harmonization.⁵

The statement announced a joint roundtable covering topics including 24/7 markets, event contracts, perpetual contracts, portfolio margining, innovation exemptions, and decentralized finance. The follow-up statement indicated that the agencies are prepared to consider certain innovation exemptions that would establish safe harbours for peer-to-peer trading of spot crypto assets over DeFi protocols. The statement characterized the right to self-custody of assets as a fundamental principle. Further, regulators characterized the right to self-custody of digital assets as a fundamental principle, while balancing it against investor protection and market integrity objectives.

The statement announced a joint roundtable addressing:

24/7 markets and continuous trading structures
Event contracts and prediction markets
Perpetual contracts
Cross-product portfolio margining
Innovation exemptions
DeFi

SEPTEMBER 29, 2025: ROUNDTABLE

In this subsequent Roundtable, discussions focused on operational realities of continuous markets, harmonized reporting standards, collateral practices, and coordinated margin frameworks. While no new rules were announced, the roundtable reflected active solicitation of industry input.

The agencies indicated willingness to consider innovation exemptions, including potential safe-harbor approaches for peer-to-peer spot crypto trading over DeFi protocols. However, no formal exemption has been adopted.

INDUSTRY RESPONSE

Industry participants have responded with measured interest.

Cody Carbone, CEO of the Digital Chamber, noted that the CFTC’s work on spot market regulation is proceeding alongside legislative efforts.⁶ Andreessen Horowitz characterized the guidance as potentially addressing offshore migration by enabling U.S. retail access to leveraged spot crypto products within a regulated framework.⁷

Nonetheless, market participants have identified unresolved questions, including:

The precise scope of “spot crypto asset product”
Regulation of margin and financing structures
Application of the framework to decentralized protocols without intermediaries
Mechanics of innovation exemptions

CONCLUSION

The SEC–CFTC joint staff statement indicate that existing U.S. law may accommodate certain leveraged retail spot crypto asset products on registered venues. Through Project Crypto and Crypto Sprint, the agencies have demonstrated increased coordination and a shift toward structured engagement with industry participants. However, these developments constitute interpretive guidance rather than comprehensive statutory reform. Durable regulatory certainty for U.S. digital asset markets will likely require Congressional legislation.

The regulatory signal is clear: innovation may proceed within disciplined, registered frameworks grounded in existing law. Product design, margin structure, clearing architecture, custody models, and surveillance mechanisms will determine regulatory treatment.

***

DISCLAIMER: This article is provided for informational and educational purposes only and does not constitute legal advice. Readers should not act upon this information without seeking professional legal counsel tailored to their specific circumstances. The analysis presented herein reflects the authors’ interpretation of legal developments as of the date of publication and may not reflect subsequent changes in law or regulation.

At TLP Advisors, we are a legal consulting firm specialising in providing cutting-edge solutions to our diverse clientele. With our roots deeply embedded in the financial services, gaming, Web3, and emerging tech sectors, we offer unparalleled knowledge and tailored support to these rapidly evolving industries; unique challenges and opportunities. TLP Advisors has consistently been the firm of choice for web3, fintech and other financial services companies, and family offices in the UAE. We have built a reputation for excellence through our frequent collaborations with key regulators in this region.

www.techlawpolicy.com

***