After Republicans regained control of Congress and the White House in the last election, the crypto industry—having contributed substantial sums to campaign efforts—moved aggressively to advance its legislative agenda. Its first win came with the GENIUS Act, which established a federal framework for issuing stablecoins. But the real prize is market structure legislation, which would settle the long-running question of how cryptocurrencies and trading platforms should be classified and supervised. In June, the House passed the CLARITY Act, which creates a federal regime for “digital commodities,” directs the CFTC to oversee their spot trading while preserving the SEC’s authority over digital asset securities, establishes disclosure requirements for token issuers, and sets registration and compliance obligations for trading platforms. Seventy-eight Democrats joined Republicans in support. The bill is now in the Senate, where lawmakers are weaving in elements from prior proposals that have circulated for several years. Unlike stablecoin regulation, market structure touches a far broader range of industry interests and competing priorities, making the path forward highly uncertain. Still, Senator Cynthia Lummis (R-WY), a leading architect of Senate proposals, recently declared the goal is to have “market structure to the president’s desk before the end of the year.”
While Capitol Hill dominates the headlines, a quieter, more deliberate effort at the SEC and CFTC has already advanced many of the objectives that market structure legislation is meant to achieve. This campaign began on the day President Trump was sworn in for a second term and gained momentum with the July 30, 2025 release of the President’s Working Group on Digital Asset Markets report (PWG Report).
The report offered few new ideas. Instead, it validated long-standing industry proposals that have appeared in various bills and endorsed the basic framework of the CLARITY Act, while suggesting a handful of “additional factors” the White House wants included in a final package. Its most consequential, and least discussed, recommendation, however, was the directive that “[t]he Securities and Exchange Commission and the Commodity Futures Trading Commission should use their existing authorities to immediately enable the trading of digital assets at the federal level.”
The PWG Report’s directive makes clear that the Trump administration is unwilling to wait for Congress to deliver what the crypto industry has long sought: the ability to preserve existing business practices with minimal oversight. After all, the industry did not spend over $200 million on the last election to be meaningfully regulated. Consider crypto exchanges. Under the Biden administration, the SEC charged several leading platforms, including Coinbase, with operating as unregistered brokers, exchanges, and clearing agencies. Under President Trump, those cases were dismissed, allowing exchanges to continue bundling functions that, in traditional securities markets, must be separated. Yet these firms aspire to far more than spot trading. They want to become the “everything store” for digital assets—offering margined trading, derivatives, tokenized equities, even prediction markets. The challenge is that these products do not fall under a single regulator: derivatives are generally overseen by the CFTC, securities by the SEC, and prediction markets—depending on their design—can implicate the CFTC and/or state law. There is a legal pathway to offer many of these products, but only if platforms are willing to register with the appropriate regulator and comply with the associated obligations. Instead, the industry has pressed for a shortcut, and the SEC and CFTC now appear willing to provide one.
CFTC: Expanding Authority Without Legislation
The CFTC regulates commodity derivatives but not commodity spot markets, though it retains enforcement authority over fraud and manipulation in those markets. As a result, cryptocurrency spot exchanges in the U.S. face no direct federal oversight; their obligations are limited to registering with FinCEN and, in some states, obtaining money transmitter licenses. This regulatory void has been repeatedly flagged by senior policymakers—including former SEC Chair Gary Gensler and former CFTC Chairs Rostin Behnam and Timothy Massad—as a fundamental weakness in the U.S. approach to digital assets. It is precisely this gap that market structure legislation is intended to close.
Acting CFTC Chair Caroline Pham has pursued a course that effectively undercuts the argument for new legislation. Immediately after the PWG report’s release, she launched a “crypto sprint” to implement its recommendations, including a request for public comment on how the CFTC might permit the listing of “spot crypto asset contracts” on Designated Contract Markets (DCMs) under its “existing authority.” This move surprised many observers who view the Commodity Exchange Act as providing no such authority. The Futures Industry Association (FIA), who has long had a cozy relationship[1] with the CFTC, underscored the point in its comment letter: “The CEA [Commodity Exchange Act] does not grant the Commission authority to adopt rules to regulate spot transactions for commodities, with the limited exception of retail spot commodity transactions within the scope of section 2(c)(2)(D) of the Act,” which covers retail commodity transactions financed by leverage, margin, or similar arrangements. The FIA goes on to state that “[t]he Commission and courts have long interpreted the CEA’s comprehensive provisions regulating futures markets as inapplicable to transactions in spot contracts for the sale of a commodity, i.e., in contracts calling for delivery within two days or such other short time consistent with cash market practices for the commodity.”[2]
If the CFTC continues down this path, crypto exchanges could register as a DCM or acquire a DCM license and, in doing so, operate a federally regulated market for spot crypto trading under the CEA. Coinbase already holds a DCM license, meaning that if the Commission endorses this approach, the company could effectively consolidate its full suite of products and services within a single entity. At that point, what purpose would market structure legislation serve?
Another product U.S.-based crypto exchanges are eager to offer is perpetual futures, or “perps.” These contracts allow traders to speculate on the price of a crypto asset and, as the name suggests, hold the position indefinitely so long as margin requirements are met. Their appeal lies in the ability to take large, leveraged bets with relatively little upfront capital—making perps enormously popular, with trading volumes more than four times larger than spot crypto transactions. Until recently, however, they were available only outside the United States.
On April 21, 2025, Acting Chairman Pham announced that the CFTC was “getting back to basics” by seeking public input on the potential uses, benefits, and risks of perpetual derivatives, including those tied to digital assets. Perpetual futures had effectively been off-limits in the U.S. because they sat in a gray zone of overlapping regulatory jurisdiction, lacked explicit recognition under the Commodity Exchange Act, and could not be listed on CFTC-registered venues without meeting extensive compliance, margin, and clearing requirements that most crypto-native platforms were ill-equipped to satisfy. Under the Biden administration, regulators also viewed the highly leveraged, 24/7 nature of perps as posing outsized risks to retail investors and market stability, while CFTC enforcement actions against overseas exchanges serving U.S. customers reinforced the legal jeopardy of offering them domestically.
The timing of the CFTC’s request for comment on perpetuals was striking. Just two days later, on April 23, 2025, CFTC-regulated DCM Bitnomial self-certified a bitcoin perpetual futures contract after more than a year of discussions with staff on methodology, pricing, and funding (self-certification allows a DCM to list a new futures contract one day after submitting documentation demonstrating compliance with the CEA and CFTC regulations). Speaking at a conference in June, Chairman Pham noted that Bitnomial “worked with the CFTC and our staff for over a year on what was the methodology, what was the pricing, what was the funding.” If the agency had already invested such effort in reviewing perpetuals, why solicit public comment on the product’s risks and uses in April? The regulatory push quickly accelerated: on June 26th, Coinbase Derivatives, another CFTC-registered DCM, filed self-certifications for bitcoin and ether perpetuals, which went live on Coinbase Financial Markets on July 21st.
On August 28th, the CFTC further opened the door for regulated crypto trading by releasing an advisory clarifying how “foreign platforms can register as so-called foreign boards of trade, provided they are fully licensed to offer derivatives in regulatory regimes that the CFTC deems comparable to US levels of oversight.” Acting Chairman Pham framed the move as offering “American companies that were forced to set up shop in foreign jurisdictions to facilitate crypto asset trading” a “path back to U.S. markets.” The advisory will certainly ease access for foreign exchanges seeking entry into the United States, but it does not automatically mean U.S. customers can trade directly on overseas platforms. CFTC rules generally require access to FBOT contracts through a U.S.-registered futures commission merchant (FCM)—though if current trends continue, it would not be surprising to see the agency explore ways to permit direct retail access. Still, enterprising exchanges will likely obtain licensure in friendly jurisdictions and, through that route, gain access to the U.S. market without having to comply with the full set of DCM requirements, including the CFTC’s core principles.
SEC: Project Crypto and the Super-App Vision
While the CFTC has been active, the more consequential developments are unfolding at the SEC. On July 31, 2025—the day after the PWG Report’s release—SEC Chairman Paul Atkins unveiled “Project Crypto” in a speech at the America First Policy Institute. He described it as “a Commission-wide initiative to modernize the securities rules and regulations to enable America’s financial markets to move on-chain.” Atkins cast the effort as consistent with the SEC’s tradition of supporting market innovation. His remarks highlighted pending rulemakings on “crypto asset distributions, custody, and trading,” and included proposals that, if implemented as expected, would allow a broader range of crypto products to trade on SEC-registered entities.
In his speech, Atkins endorsed the concept of a “super-app,” arguing that “securities intermediaries should be able to offer a broad range of products and services under one roof with a single license.” In practice, this would allow broker-dealers with an alternative trading system (ATS) to facilitate trading in non-security crypto assets alongside crypto asset securities and traditional securities “without requiring fifty-plus state licenses or multiple federal licenses.” He went further, stating that “nothing in the federal securities laws prohibits SEC-registered trading venues from listing non-securities on their platforms today.” That message was surely welcome at Robinhood, which currently offers crypto trading through Robinhood Crypto, a separate legal entity from its brokerage platform that relies on a patchwork of state money-transmitter licenses. Robinhood has long sought to consolidate its operations under one license and shared infrastructure. In a letter to the SEC, the firm argued that “all registered broker-dealers should be able to custody and trade traditional securities, tokenized securities, and tokenized non-securities within the same regulated entity.”
Robinhood has also begun offering customers access to event contracts—such as wagers on the outcome of football games—through a partnership with Kalshi, a CFTC-registered DCM. These products are offered via Robinhood Derivatives LLC, which itself is registered with the CFTC as a futures commission merchant (FCM). However, the launch is drawing scrutiny from state gaming regulators: multiple state authorities—including those in Nevada, New Jersey, Massachusetts, and Maryland—have issued cease‑and‑desist letters or initiated legal actions, asserting that Robinhood’s sports‑related event contracts violate state gambling laws
Robinhood’s ambitions extend far beyond event contracts. Earlier this summer, the firm made headlines by offering tokenized U.S. equities to customers in the European Union. The rollout included tokenized shares of private companies such as SpaceX and OpenAI, with the latter publicly stating that it had not authorized the tokenization of its stock. These products are not available in the United States due to securities law constraints, and if offered domestically, private-company tokens would almost certainly violate registration and resale requirements, including the Howey test for investment contracts. In an April 2025 letter to the SEC, likely anticipating their EU launch, Robinhood urged the agency to adopt a “new regulatory approach” that would “allow tokenization to flourish.”
Robinhood is well on its way to realizing Chair Atkins’s “super-app” vision—and Atkins appears eager to assist. In his Project Crypto speech, he offered a strong endorsement of tokenized securities—the digital representation of securities ownership on a blockchain ledger—and said he had directed “Commission staff to work with firms seeking to distribute tokenized securities within the United States and to provide relief where appropriate to assure that Americans are not left behind.”
Coinbase has similar ambitions for a super-app and recently announced plans to offer customers “tokenized real-world assets, stocks, derivatives, prediction markets, and early-stage token sales.” The announcement came the same day as Atkins’s Project Crypto speech—a timing that was unlikely to be coincidental. Because Coinbase is not registered with the SEC, it cannot offer tokenized equities without first obtaining no-action or exemptive relief, which the company has formally requested. If granted, that relief would move Coinbase significantly closer to CEO Brian Armstrong’s goal of making the firm the leading financial services app within the next decade.
Joint SEC and CFTC Guidance: Blurring the Boundaries
On September 2nd, the SEC and CFTC issued a joint statement advancing the PWG Report’s call to “keep blockchain-based innovation within the United States.” The agencies declared that “current law does not prohibit SEC- or CFTC-registered exchanges from facilitating trading of leveraged, margined, or financed spot retail commodity transactions on digital assets.” The statement further explained that SEC-registered national securities exchanges (NSEs) may list such “retail commodity transactions,” and that these transactions are exempt from the Commodity Exchange Act’s requirement that certain leveraged or margined retail commodity trades occur on a CFTC-registered DCM or FBOT.
The statement’s repeated reference to “certain spot crypto asset products” is ambiguous—likely by design. In common usage, “spot trading” refers to cash transactions and excludes leveraged, margined, or financed activity. It is therefore unclear whether the joint statement authorizes straightforward spot trading of assets like bitcoin or ether on NSEs, DCMs, or FBOTs. As noted earlier, Acting Chairman Pham appears to believe such activity is already permissible at CFTC registrants. Yet the statement’s introduction frames its purpose as guidance on the PWG Report’s recommendation concerning “leveraged, margined, or financed spot retail commodity transactions on digital assets.” That emphasis suggests the statement does not extend to cash trading, though some market observers have interpreted it as opening the door for spot crypto trading—with or without margin—on SEC- or CFTC-registered exchanges.
Conclusion
If this all sounds confusing, you are not alone. In just seven months, a series of coordinated policy actions by the SEC and CFTC—backed by the White House—has steadily eroded the traditional boundary between securities and derivatives regulation. If current trends hold, crypto assets in all their forms will soon be tradable on SEC- and CFTC-registered platforms. At that point, firms will no longer need to restructure their business models or worry about holding the “right” license to roll out new products. One license from either agency may be enough to do virtually anything.
This naturally raises the question: why maintain separate regulators for derivatives and securities at all? As I argued in a Wall Street Journal op-ed last December, now is the time to merge the two agencies. Paul Atkins has long advocated this view and recently confirmed his stance, remarking that a merger “makes a lot of sense.” But rather than work with Congress to advance a genuine merger, Chair Atkins—joined by Acting Chairman Pham—appears intent on engineering a de facto consolidation of the SEC and CFTC for the narrow purpose of facilitating crypto trading. This approach deprives the public and market participants of an open debate not only on the merits of combining the agencies, but also on whether the agencies’ regulatory reforms should apply beyond crypto. Established securities firms have already voiced concerns. Both SIFMA and Citadel submitted letters urging the SEC to reject broad exemptions or no-action relief that would allow tokenization platforms to bypass existing safeguards, insisting instead on a full public rulemaking process.
From the industry’s perspective, recent SEC and CFTC actions have already delivered many of the same outcomes that market structure legislation is designed to achieve. Such legislation aims to establish clear criteria for distinguishing crypto assets as securities, commodities, or outside either category, and to create a framework for the secondary trading of those deemed commodities—what the CLARITY Act terms “digital commodities.” Yet, as outlined above, the SEC and CFTC appear determined to pursue these objectives on their own, regardless of what happens in Congress.
By unilaterally granting the crypto industry much of its policy wish list, the SEC and CFTC may stall momentum for market structure legislation on Capitol Hill. Some may worry that a future Democratic administration could reverse these changes and restore the Biden-era approach to crypto oversight. But this concern is overstated. In finance, once the toothpaste is out of the tube, it is nearly impossible to put it back in. The SEC and CFTC’s recent actions will enable both new and established firms to expand the range of crypto products and services offered to the public. Just as no one seriously contemplates delisting bitcoin ETFs, future regulators will find it nearly impossible to unwind these changes without punishing firms and investors who simply followed the rules in place at the time. Like it or not, crypto will be everything everywhere all at once—and there is no going back.
Lee Reiners is a lecturing fellow at Duke University
[1] Speaking at the FIA’s 2025 conference in Boca Raton, Acting Chairman Pham said: “For 50 years, FIA has been there every step of the way as a partner to the CFTC.” See, Keynote Address by Acting Chairman Caroline D. Pham, FIA BOCA50 | CFTC
[2] The FIA does note there is precedent for DCMs to offer spot markets for commodities outside of their regulated CFTC markets but it is pretty clear that the intent of the CFTC’s request for comment is to provide a regulated market for spot crypto trading.
