SEC and CFTC Forge Unprecedented Alliance for DeFi Regulatory Clarity

Wall Street's watchdogs finally stop fighting over the crypto bone.

The Regulatory Truce

SEC Chair Gary Gensler and CFTC head Rostin Behnam declared their jurisdictional turf wars officially over during Wednesday's congressional hearing. Both agencies confirmed they're now collaborating on joint frameworks for decentralized finance and on-chain financial products.

The Coordination Mechanism

Instead of competing for enforcement headlines, the agencies established a formal information-sharing protocol and joint task forces. They're coordinating examination schedules and developing unified classification standards for digital assets—something the industry's been begging for since 2017.

The DeFi Dilemma

Regulators finally acknowledged that existing securities and commodities frameworks don't neatly fit decentralized protocols. Their solution? A new hybrid approach that looks at both the asset's economic reality and its technological implementation.

Because nothing says 'innovation' like two government agencies requiring three years to agree they should talk to each other.

SEC and CFTC to consider DeFi regulatory exemptions

The agencies said they are prepared to consider “innovation exemptions” for DeFi. Such exemptions could permit peer-to-peer trading and other complex market operations under defined guardrails. They also referenced prior work to bring crypto perpetual contracts back onshore.

Among some of the topics in the latest statement were the potential advantages of on-chain finance. The agencies discussed expanding trading hours and noted that other markets, including crypto, already offer 24/7 trading.