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On January 29, the SEC and the CFTC unveiled the relaunch of "Project Crypto," positioning the initiative as a coordinated interagency effort to prepare for forthcoming federal digital asset market structure legislation and to address longstanding jurisdictional fragmentation between the agencies.
In remarks delivered an event at CFTC headquarters, SEC Chair Paul S. Atkins and CFTC Chair Michael S. Selig described the relaunch as a shift toward interagency coordination designed to reduce fragmentation in digital asset oversight. The chairs emphasized that while Congress may soon establish a statutory framework, regulatory clarity will depend on disciplined and harmonized implementation across both agencies.
Promises of interagency coordination in the crypto space is nothing new. During the prior Administration, leaders from both agencies publicly indicated they were willing to work together to co-regulate. However, the sentiment of a "turf war" nonetheless persisted. Will past be prologue? Several changed circumstances suggest an increased likelihood that outward-expressed desires for harmonization will match reality this time.
First, the SEC has released its grip on the Howey Test and its promise to establish the contours of the SEC's crypto jurisdiction through expansive litigation, while already having reached the conclusion internally that the "vast majority" of digital assets were securities. Second, Congress has taken up the torch of enacting legislation that will inform regulatory rulemaking with unique vigor. There is some confidence the Congress will deliver definitional clarity for digital asset securities and commodities that will inform regulatory efforts. Third, the two agency leaders share both a personal bond and intellectual alignment on the issue of crypto, with CFTC Chairman Selig previously serving as senior adviser to Chairman Atkins and chief counsel of the SEC's Crypto Task Force under crypto-friendly Commissioner Hester Peirce.
Against this backdrop, the agency heads outlined several core priorities for the renewed initiative:
- Aligned definitions and coordinated oversight. The SEC and CFTC indicated they will work toward harmonizing core terminology and supervisory approaches to address inconsistent treatment of economically similar digital asset activities.
- Minimizing duplicative regulatory requirements. The chairs signaled that market participants should not be subject to conflicting rules regarding trading, clearing, settlement and custody, with Chair Selig noting that "regulatory seams create friction that impairs risk management, margin efficiency, and surveillance effectiveness."
- Sequenced implementation of new obligations. As federal legislation draws near, Chair Selig anticipates that new requirements for industry participants will be sequenced – not stacked – to facilitate smooth regulatory on-ramps and set new entrants, incumbents, and investors up for success.
- Modernized surveillance and interagency data sharing. Both agencies committed to using their tools to reduce, not create, regulatory friction, with Chair Selig previewing modern surveillance tools designed for both on-chain and hybrid market activity.
The relaunch builds on prior SEC-focused Project Crypto initiatives but expands the scope to encompass broader jurisdictional coordination between securities and commodities regulators. The agencies framed the effort as grounded in statutory authority, market integrity, and regulatory precision rather than enforcement-driven policymaking.
Putting It Into Practice: The relaunch of Project Crypto (previously discussed here) signals increased coordination between the SEC and CFTC in anticipation of new federal digital asset legislation. As the pressure builds on Congress to finalize a statutory framework that will guide agency rulemaking efforts, the now co-branded Project Crypto will be carried forward by two Chairs with a shared personal history and vision for crypto's advancement, increasing the prospects of long-promised regulatory harmony.
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