America’s top regulators finally come to a consensus on regulation
On March 11, the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC) announced a Memorandum of Understanding (MOU) to coordinate how they oversee financial markets, including cryptocurrencies like Bitcoin and Ethereum.
The official announcement outlined how the agreement is meant to improve cooperation between the agencies and create clearer rules for companies operating in crypto and other emerging technologies.
For years, the two regulators have had overlapping responsibilities, which often created uncertainty about who actually regulates the crypto industry.
Related: Ex-CFTC Chair Dithers on Whether Ether Is Security or Commodity
The new agreement introduces a Joint Harmonization Initiative, which will allow the agencies to work together on rulemaking, enforcement and market oversight.
“I am pleased to report that we are reorienting our approach toward a new golden age of regulatory coherence," wrote SEC Chairman Paul S. Atkins.
Under the initiative, the two agencies plan to coordinate on several areas including product definitions, trading rules, market reporting requirements and oversight of crypto markets.
What are the SEC and the CFTC?
The SEC and CFTC are two separate regulators that oversee different parts of the U.S. financial system.
The SEC (Securities and Exchange Commission) regulates traditional investment markets such as stocks, bonds and investment funds. Its main job is to protect investors and make sure companies follow securities laws.
The CFTC (Commodity Futures Trading Commission) oversees commodities and derivatives markets. This includes futures and options contracts tied to assets like oil, gold, wheat, and more recently, cryptocurrencies.
Because crypto assets can sometimes behave like both commodities and investment securities, regulators have struggled to decide which agency should oversee them.
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Long history of regulatory confusion
The new agreement comes after years of disagreements between the SEC and CFTC about crypto regulation.
In some cases, the two agencies have cooperated. For example, in 2018 the SEC and CFTC issued a joint statement warning investors about fraud in cryptocurrency markets.
Around the same time, Bitcoin futures trading launched in regulated markets, which placed some crypto derivatives under the CFTC's oversight.
Later in 2018, William Hinman, then head of the SEC's Division of Corporation Finance, said that Bitcoin and Ethereum were decentralized enough to be treated as commodities rather than securities.
Related: Ava Labs counsel says crypto’s regulatory signals will come from SEC, CFTC rules
The CFTC reinforced that position in 2020, when then-Chairman Heath Tarbert said both Bitcoin and Ether should be considered commodities .
"We've been very clear on Bitcoin: bitcoin is a commodity under the Commodity Exchange Act," Tarbert said.
"We haven't said anything about Ether – until now. It is my view as Chairman of the CFTC that Ether is a commodity."
That classification helped pave the way for regulated Ether futures to launch on the Chicago Mercantile Exchange in 2021, which operates under CFTC supervision.
SEC crackdown increased tensions
The relationship between the agencies became more complicated after Gary Gensler became SEC chairman in 2021.
Under Gensler, the SEC began taking a much stricter approach toward crypto companies. The regulator filed enforcement actions against several major firms including Kraken , Coinbase and Binance , arguing that some crypto products were unregistered securities.
These actions created uncertainty across the industry, particularly around whether Ethereum might be classified as a security due to its proof-of-stake model.
Meanwhile, officials at the CFTC continued to argue that Ether should be treated as a commodity.
This disagreement raised concerns that crypto exchanges could end up following the rules of one regulator while accidentally violating the rules of another.
Courts begin shaping crypto law
U.S. courts have also started influencing how crypto assets are classified.
In July 2023, a federal judge ruled in the SEC's case against Ripple that XRP is not inherently a security, especially when traded on secondary markets.
Another court later dismissed several charges in the SEC's lawsuit against Binance using similar reasoning.
These decisions suggested that crypto tokens themselves may not always qualify as securities, even if some fundraising methods involving them do.
This story was originally published by TheStreet on Mar 12, 2026, where it first appeared in the Policy section. Add TheStreet as a Preferred Source by clicking here.
