The U.S. SEC and CFTC join forces for the first time, potentially allowing perpetual contracts and a 24/7 market

2025-09-08 21:35:28

Collection

Derivatives, prediction markets, and DeFi have become "policy-friendly sectors."

Original Title: US SEC and CFTC Join Forces: US Crypto Regulation Shifts to Open Perpetual Contracts and 24/7 Trading

Original Author: Wenser, Odaily Planet Daily

On September 5, the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) jointly released two major statements.

One states that they will increase collaboration to support the development of areas such as crypto assets, DeFi, prediction markets, perpetual contracts, and portfolio margining; they will also enhance the competitiveness of the US market through regulatory rule coordination, narrowing regulatory gaps, extending trading hours, and utilizing innovative exemption measures. The other previewed that the two parties will hold a joint roundtable on September 29, planning to discuss topics including "considering coordinated definitions of products and venues, simplifying reporting and data standards, adjusting capital and profit frameworks, and utilizing each agency's existing exemption powers to establish coordinated innovative exemptions."

As two crucial regulatory bodies in the US economic system, the actions of the SEC and CFTC may signal a new wave of US crypto regulation. Odaily Planet Daily will briefly analyze this event and its related impacts in this article.

Core Objective of US SEC & CFTC Joint Regulation: Make American Capital Great Again

In the two statements jointly issued by the SEC and CFTC, both mentioned "ensuring the US's leading position in global capital markets," indicating that the core objective of this joint regulation is still part of the Trump administration's "America First" policy. Specifically, the main impacts of joint regulation are reflected in the following aspects:

1. Opening the US Market to Crypto Trading Platforms

According to previous information and the joint statement from the two departments, the CFTC plans to issue guidance on "clarifying registration rules for foreign trading platforms," and the prediction market Polymarket has received CFTC approval to return to the US market. The SEC and CFTC will study the introduction of perpetual contracts in the US market, allowing traders to participate in related products that previously existed mainly overseas on domestic platforms. Additionally, both parties plan to explore 24/7 markets, prediction markets, portfolio margin optimization, and DeFi innovative exemptions.

Undoubtedly, after Trump took office, the US government reversed its previous "closed-door" stance towards the cryptocurrency industry and plans to fully open the US market to attract numerous crypto trading platforms to participate in the construction of the US crypto economy.

2. Further Attracting Overseas Capital Liquidity

The CFTC's plan to clarify registration rules for foreign trading platforms (FBOT) is expected not only to attract trading platform infrastructure to the US market but also to facilitate the large-scale inflow of funds, capital, and liquidity from US users and global crypto users through this channel. Participants in the US crypto market, including Gemini, Kraken, and Coinbase, will also reach more users and liquidity globally.

As CFTC Acting Chair Caroline D. Pham previously stated: "This is a way to 'bring crypto activities back to the US,' which had previously flowed out due to enforcement regulations during the Biden administration, while reaffirming the regulatory framework that has existed since the 1990s. For US traders, this means legal access to more global liquidity; for the crypto industry, this is another step towards regulatory clarity and a move in the Trump administration's 'crypto sprint strategy.'"

3. Reducing Regulatory Costs and Improving Enforcement Efficiency

Under existing US laws, both the SEC and CFTC are financial regulatory agencies, but their sources of power differ: the SEC is primarily established and enforced based on the Securities Act of 1933 and the Securities Exchange Act of 1934, while the CFTC exists and regulates based on the Commodity Exchange Act (CEA). In other words, the SEC mainly regulates the securities market, emphasizing investor protection and disclosure requirements, imposing penalties including civil fines, injunctions, and criminal referrals; while the CFTC focuses on the commodity futures and derivatives markets, emphasizing risk management and anti-manipulation, often involving leveraged trading and high-risk derivatives. Joint regulation will reduce the compliance burden on crypto platforms (such as margin capital lock-up) while further clarifying the boundaries of both parties' powers, thereby reducing regulatory cost inputs and improving enforcement efficiency—truly "to God what is God's, and to Caesar what is Caesar's."

4. Encouraging Innovation While Strengthening Risk Control

The introduction of multiple potential policies and favorable measures will further encourage the innovative development of domestic crypto enterprises in the US, especially the 24/7 trading, portfolio margining, and DeFi innovative exemptions, which are expected to inject new momentum into the development of DeFi in the US financial sector. Furthermore, the two departments emphasized "meeting investor and customer protection standards," and relevant policies may be introduced to further strengthen risk control and reduce market manipulation. In the long term, this move may effectively reduce the occurrence of chaotic price manipulation and speculation events currently present in the crypto market.

After Crypto IPOs, Crypto Derivatives May Become the New High Ground for Innovation in the US

Following the completion of IPO events for benchmark companies in the crypto industry such as "crypto asset management giant" Galaxy, "stablecoin first stock" Circle, and crypto trading platform Bullish, the joint regulatory statement from the SEC and CFTC may position crypto derivatives and DeFi as the next high ground for crypto innovation in the US.

In the past, due to the high-pressure regulatory environment in the US, many cryptocurrency exchanges and projects avoided the US user market. However, the joint statement from the SEC and CFTC serves as a signal for a new round of regulatory direction: encouraging rapid development and prosperity of the US crypto financial market, while launching more innovative products that meet exemption requirements based on risk control and investor protection.

On one hand, "domestic crypto projects" such as WLFI, Uniswap, Solana, and Moonpay may welcome a new round of expansion and favorable regulatory policies;

On the other hand, participants in the US crypto market such as Coinbase, Gemini, Kraken, Kalshi, Polymarket, as well as Bitcoin spot ETFs, Ethereum spot ETFs, and other cryptocurrency index funds and related assets will see more active traders and a new wave of liquidity.

It is worth mentioning that this joint regulation may open up possibilities for the US financial market to activate traditional financial market liquidity through the crypto economic system, including traditional fund institutions such as traditional index funds, state pension funds, and university endowment funds, which are expected to engage in more crypto asset allocation.

Combined with Nasdaq's previous statement to tighten regulatory measures related to the establishment of cryptocurrency reserves by listed companies, achieving the "dual success of coins and stocks" purely through a shell company strategy has become increasingly difficult, and one can only hope for more standardized and innovative crypto financial product innovations and liquidity introduction.

Additionally, although "BTC hoarding first stock" Strategy meets all the hard requirements of S&P 500 constituent stocks, it has not been selected for the S&P 500. However, CFTC Acting Chair Caroline Pham previously described this matter as "the 'Uberization' process of Bitcoin," indicating that digital assets have become so integrated into the US economic system that they are difficult to remove, highlighting the CFTC's emphasis on crypto concept stocks.

Unlike the internet economy, which has permeated various aspects of people's lives, the cryptocurrency industry currently remains limited to financial investment. However, with the development of different tracks such as PayFi, DeFi, prediction markets, and the tokenization of US stocks, the crypto economy is expected to further achieve mainstream progress based on ETF funds.

Additional Timeline of CFTC Regulatory Measures:

On August 21, CFTC Acting Chair Caroline D. Pham announced that the CFTC would initiate the next phase of the crypto sprint plan to implement the recommendations in the President's Digital Asset Market Working Group report. This plan focuses on advancing federal-level digital asset spot trading and coordinating with the SEC's "Crypto Project" activities, echoing President Trump's call for the US to achieve a leadership position in the crypto field.

On September 5, the CFTC and SEC jointly released a statement proposing to promote joint regulation of crypto and derivatives.

On September 29, the CFTC and SEC joint roundtable will be held at the SEC headquarters located at 100 NE F Street, Washington, D.C., and will be open to the public for offline participation, while also being live-streamed on the SEC website; the recording of the roundtable will be published on the SEC's official website, with details of the agenda and participants available here.

According to previous statements by CFTC Acting Chair Caroline D. Pham, the CFTC will widely solicit opinions from stakeholders, covering topics such as leverage, margin, and retail trading financing, and will open a public comment channel before October 20.

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