SEC and CFTC Announce Joint 'Project Crypto' Initiative at Historic Harmonization Event

After years of regulatory turf wars and jurisdictional uncertainty, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) are signaling a new chapter in their relationship. SEC Chairman Paul Atkins and CFTC Chairman Michael Selig convened a joint roundtable on January 29, relaunching “Project Crypto,” as an inter-agency effort to coordinate federal oversight of crypto asset markets.[1] The event brought together regulators and industry stakeholders for opening remarks and a fireside chat with the two chairmen. The roundtable signals a notable departure from the historically fragmented and at times adversarial relationship between the two agencies. 

Chairman Atkins’ Remarks: Ending the “Turf Wars”

Chairman Atkins emphasized the need for a “new era of cooperation” between the SEC and CFTC, candidly acknowledging the agencies’ checkered history. Drawing on his nearly 35 years of experience across three stints at the SEC, Atkins observed that he has witnessed the “good, bad and ugly” of interagency relations, including periods of “fisticuffs” and agencies “casting aspersions” at one another. 

Atkins characterized the current regulatory landscape as a “maze of overlapping and often inconsistent regulatory frameworks” and spoke of a “no man’s land” between the SEC and CFTC, where innovative products have struggled to launch due to regulatory uncertainty.  Perpetual futures, he noted, are a prime example of products that have migrated offshore because of this ambiguity. 

During the fireside chat, Atkins offered updates on the SEC’s anticipated innovation exemption, which he had previously suggested might be released by the end of January. While still in development, Atkins explained that the SEC wants to “measure twice and cut once.” He clarified, however, that the SEC is not necessarily waiting on market structure legislation before releasing the exemption. 

Looking ahead, Atkins revealed plans for a comprehensive memorandum of understanding between the two agencies. Atkins expressed his intention to pursue this new coordination “very robustly” for the sake of “future proofing” the agencies’ collaboration. He also advocated for joint rulemakings, even on a voluntary basis, noting that doing so would make it harder for future administrations to undo the agencies’ collaborative efforts.

Chairman Selig’s Remarks: A New Accord for the Digital Age

Chairman Selig, delivering his first public remarks as CFTC Chairman, traced the long history of American commodity markets from the founding of the Chicago Board of Trade in 1848 through the “bucket shops” of the late nineteenth century to the modern era of blockchain technology.  Chairman Selig explained that the CFTC is building on the foundation former Acting Chairman Caroline Pham laid by launching the Crypto Sprint initiative. Rather than running a parallel initiative with the SEC, Chair Selig announced that the CFTC is partnering with the SEC on Project Crypto — bringing coordination, coherence, and a unified approach to federal oversight of crypto asset markets. He characterized the current moment as an opportunity for a new “Shad-Johnson Accord” — a reference to the historic cross-agency agreement that resolved jurisdictional disputes over single-stock futures and security index futures.

Selig announced several concrete initiatives, including directing CFTC staff to withdraw the controversial 2024 event contracts rule proposal and the 2025 staff advisory concerning political and sports-related prediction markets. He also confirmed that the CFTC will draft new rules on onshore perpetual derivatives and expand the types of eligible tokenized collateral for use in derivatives markets. 

In the fireside chat, Selig clarified his recent statement about capital markets coming “on chain,” explaining that he did not mean all capital markets, but rather that interest in tokenized securities and tokenized derivative instruments is growing rapidly and that the agencies must embrace this trend. He highlighted the newly renamed Innovation Advisory Committee, comprised of CEOs from leading digital asset firms, prediction market platforms and major exchanges like ICE and NASDAQ, with additional members to be announced soon. 

Selig described the partnership with the SEC as “coordination, not consolidation,” emphasizing that the goal is to eliminate gaps in regulatory coverage, reduce duplicative registration requirements, and share market data and surveillance. Both chairmen expressed strong support for pending market structure legislation, and Chairman Selig acknowledged that having clear statutory authority would help “future proof” the industry against potential regulatory reversals.