CFTC Partners With SEC On ‘Project Crypto’ For Unified Regulatory Approach

The Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have announced they are relaunching the Project Crypto initiative as a joint policy effort to prepare US markets for the digital era.

The SEC-CFTC harmonization agenda will focus on the fundamentals, as the chairmen detailed, including aligned definitions, coordinated oversight, and seamless, secure data sharing between agencies. “Harmonization strengthens standards through coherence, predictability, and economic rationality.”

The agencies aim to ensure that “innovation takes root on American soil, under American law, and in service of American investors, customers, and businesses,” Selig affirmed during his opening remarks.

He added that he had directed the CFTC staff to work with the SEC to study “joint codification” of the common-sense crypto asset taxonomy recently laid by Atkins, “as an interim measure while Congress finalizes legislation.”

At its core, Project Crypto and our broader harmonization efforts reflect a shared philosophy: financial regulation must be precise, not punitive. Rules must be narrowly tailored to address material risks, nimble enough to adapt to technological change and remain anchored in our agencies’ statutory authorities.

During the panel, Chair Atkins discussed the timeline for the Commission’s long-awaited innovation exemption for the crypto industry, which was initially expected to come before the end of January.

The measure would allow crypto firms to quickly launch products by complying with “certain principles-based conditions designed to achieve the core policy aims of the federal securities laws” instead of “burdensome prescriptive regulatory requirements that hinder productive economic activity.”

In addition, he noted that last year’s government shutdown delayed progress on crypto regulation, adding that the potential new shutdown could further delay the highly anticipated measure.

“I just want to make sure that we keep the train going forward at full speed and for all parties’ sake,” he asserted, but did not offer a new potential timeline for the innovation exemption rollout.

Meanwhile, Chair Selig also shared his plan to explore “ways in which the agency can encourage innovation in software development and support builders as they work toward product market fit.” This includes assessing whether an innovation exemption “may be appropriate in certain circumstances.”