SEC and CFTC Announce Joint “Project Crypto” Initiative and Signal Coordinated Regulatory Push for Digital Asset Markets

On January 30, 2026, Securities and Exchange Commission (SEC) Chair Paul Atkins and Commodity Futures Trading Commission (CFTC) Chair Michael Selig announced that Project Crypto—previously an SEC-led initiative—will proceed as a joint effort between the SEC and the CFTC to harmonize federal oversight of digital asset markets. Speaking at the CFTC’s headquarters, the Chairs emphasized that closer coordination between the agencies is necessary to reduce regulatory uncertainty, eliminate duplicative compliance obligations, and position U.S. markets to remain competitive as crypto and blockchain-based market structures continue to develop.

The announcement comes as Congress appears close to advancing bipartisan digital asset market structure legislation. Both Chairs underscored, however, that legislative action alone will not provide sufficient near-term certainty for market participants. Accordingly, the agencies intend to make active use of their existing statutory authorities while preparing to implement any future legislation in a coordinated and consistent manner.

A Shift Toward Formalized Interagency Coordination

Chair Atkins framed Project Crypto as one of the most ambitious interagency initiatives between the SEC and the CFTC in decades, noting that modern financial markets increasingly operate across asset classes, platforms, and technologies that do not align neatly with historical jurisdictional boundaries. In his view, fragmented regulation in an integrated market environment creates the risk of confusion for investors and inefficiencies for market participants rather than providing meaningful protection.

Chair Selig echoed this view, describing the initiative as a “generational opportunity” for the agencies to move beyond past jurisdictional disputes and toward a more durable and principles-based regulatory framework, referencing the Shad-Johnson accords as a historical precedent.[1] Both Chairs emphasized that the initiative reflects coordination rather than consolidation, with each agency continuing to operate within its statutory mandate while working to align standards, definitions, and supervisory approaches where appropriate.

As part of this effort, the Chairs indicated that the SEC and CFTC intend to develop a more comprehensive memorandum of understanding to formalize information sharing, surveillance coordination, and supervisory cooperation. They also emphasized routine leadership-level engagement and day-to-day collaboration among agency staff as a means of ensuring that coordination persists beyond current leadership tenures.

Regulatory Priorities Under Project Crypto

In outlining the substantive scope of Project Crypto, Chair Selig identified several priority areas where the CFTC has already directed staff to begin work, often in coordination with SEC staff. A central focus will be the development of a clearer crypto asset taxonomy to delineate jurisdictional boundaries between the agencies. Chair Selig agreed with Chair Atkins’ view that many crypto assets currently trading in secondary markets are not securities, including tools, commodities, and collectibles even when sold pursuant to an investment contract,[2] and stated that CFTC staff have been instructed to work with the SEC on potential joint codification of a token taxonomy as an interim measure while Congress considers statutory definitions.

The Chairs also signaled an intention to modernize regulatory frameworks to accommodate blockchain-based market infrastructure. Chair Selig directed staff to explore rulemaking to permit the responsible use of additional forms of tokenized collateral and to facilitate the onshoring of novel derivatives products, including perpetual contracts, that have largely developed offshore due to regulatory uncertainty in the United States. In addition, he announced plans to reassess the CFTC’s existing rules governing leveraged, margined, or financed retail commodity transactions in crypto assets, including potential clarification of the “actual delivery” exception[3] and consideration of a tailored regulatory framework for trading venues that offer such products.

With respect to prediction markets and event contracts, Chair Selig announced a significant policy shift. He directed staff to withdraw the CFTC’s 2024 proposed rule that would have restricted political and sports-related event contracts,[4] as well as a 2025 staff advisory notice that had cautioned registrants regarding sports-related event contracts.[5] He further instructed staff to move forward with a new event contracts rulemaking designed to establish clearer and more workable standards for these products.

Both Chairs also emphasized the importance of substituted compliance and harmonization to reduce unnecessary regulatory duplication. They suggested that, where consistent investor protection outcomes can be achieved, market participants should not be required to navigate overlapping registration regimes or inconsistent compliance obligations simply as a result of historical regulatory divisions.[6]

Interaction with Congressional Market Structure Legislation

Throughout the discussion, the Chairs acknowledged the importance of pending congressional action on digital asset market structure.[7] While emphasizing that the agencies will continue to act within their existing authorities, both Chairs stressed that legislation would provide greater durability and predictability by anchoring regulatory frameworks in statute and reducing the risk of policy reversals across administrations.[8]

Chair Selig noted that the agencies have been providing technical assistance to congressional committees as draft legislation has evolved and indicated that the agencies stand ready to fill regulatory gaps through rulemaking or guidance where legislation leaves room for agency discretion.

Looking Ahead

Project Crypto reflects a shared commitment by the SEC and CFTC to move beyond ad hoc coordination and toward a more integrated and forward-looking regulatory approach. While many details remain to be worked out through staff action and formal rulemaking, the initiative signals that market participants can expect a more unified federal response to the continued evolution of crypto and blockchain-based financial markets.

Market participants should expect increased interagency coordination, greater clarity around jurisdictional boundaries, and an accelerated pace of rulemaking and guidance affecting token classification, trading platforms, custody and collateral arrangements, derivatives products, and event markets.

Firms operating at the intersection of securities and commodities regulation—including trading venues, token issuers, asset managers, custodians, and fintech platforms—should anticipate closer scrutiny of how products are structured and marketed, as well as enhanced data sharing and surveillance across agencies. At the same time, the Chairs’ repeated emphasis on onshoring innovation and reducing regulatory fragmentation suggests an openness to new product development where appropriate guardrails can be established.

[1] 7 U.S.C. § 2(a)(1)(D) (codifying provisions of the Shad-Johnson Jurisdictional Accord, delineating jurisdictional boundaries between the SEC and CFTC with respect to certain securities-based futures products and serving as a historical precedent for cross-agency alignment).

[2] An “investment contract” is expressly included within the statutory definition of a “security” under the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Company Act of 1940. See 15 U.S.C.

§§ 77b(a)(1), 78c(a)(10); 15 U.S.C. § 80a-2(a)(36). Whether a particular arrangement constitutes an investment contract is determined under the Supreme Court’s common-law test articulated in SEC v. W.J. Howey Co., 328 U.S. 293 (1946), which remains the governing standard and may be applied by federal and state regulators as well as private plaintiffs in actions alleging violations of Section 5 of the Securities Act.

[3] 85 Fed. Reg. 37734 (June 24, 2020).

[4] CFTC Proposes Rule Amendments Addressing Event Contracts, Press Release No. 8907-24 (2024).

[5] CFTC Staff Letter No. 25-36: Certain Contract Markets (2025).

[6] In recent statements, SEC staff have articulated circumstances in which certain crypto-related activities may fall outside the federal securities laws or otherwise present reduced regulatory concerns, reflecting an effort to provide clarity and avoid unnecessary or duplicative regulation where investor protection objectives can be achieved through other means. See, e.g., SEC, Statement on Certain Protocol Staking Activities (May 29, 2025); SEC, Staff Statement on Meme Coins (Feb. 27, 2025); SEC, Statement on Stablecoins (Apr. 4, 2025). These statements reflect staff views only and do not alter the statutory definition of a “security” or limit the application of federal or state securities laws in appropriate circumstances.

[7] See, e.g., H.R. 3633, 119th Cong. (2025) (Digital Asset Market CLARITY Act of 2025) (proposing a federal framework for digital commodity and security regulation); Digital Commodity Intermediaries Act (as approved by the S. Comm. on Agric., Nutrition & Forestry, Jan. 29, 2026) (advancing a framework for regulating digital commodity intermediaries and clarifying CFTC authority over digital commodity markets).

[8] The SEC and CFTC operate under distinct statutory mandates that reflect different regulatory objectives and market assumptions. Compare Securities Act of 1933 and Securities Exchange Act of 1934 (emphasizing disclosure, investor protection, and regulation of capital formation and secondary trading) with the Commodity Exchange Act, 7 U.S.C. §§ 1 et seq. (emphasizing market integrity, price discovery, and risk management in derivatives and certain spot markets). These differences may constrain the extent to which certain regulatory approaches—particularly those premised on principles-based oversight or reduced intermediary obligations—can be harmonized across agencies without legislative action.