SEC, CFTC Division to end Fragmented US Crypto Landscape

The White House’s long-awaited report on cryptocurrency policy recommendations that could bring an end to years of regulatory uncertainty for digital asset firms, many of which have struggled with unclear guidance around securities laws.

US President Donald Trump’s Working Group on Digital Assets released its crypto policy report last Wednesday, which outlines recommendations on market structure, banking regulations and methods to bolster the US dollar’s dominance through stablecoins and crypto tax laws.

One of the report’s key proposals is a clearer division of responsibilities between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The CFTC would gain authority over spot crypto markets, addressing longstanding concerns about overlapping or conflicting enforcement.

Clarifying regulatory oversight limitations between the two agencies will lay the groundwork for a “mature, transparent and scalable crypto ecosystem,” said Edwin Mata, a blockchain lawyer and CEO of tokenization platform Brickken, in a statement to Cointelegraph.

Source: whitehouse.gov

“Letting each body oversee the instruments that best align with their expertise avoids duplication and confusion,” allowing for “consistent legal interpretations,” Mata said, adding:

“This is critical in jurisdictions like the United States, where case law and precedent play a dominant role.”

According to Mata, inconsistent regulatory positions in the past led to fragmented legal interpretations, forcing courts to resolve disputes between agencies. He said the report could “promote coherent jurisprudence and allow legal opinions to be formed on solid ground.”

Ripple lawsuit resolution sets backdrop

The White House’s policy recommendations were published over two months after the resolution of one of the most high-profile legal disputes in crypto history: the SEC’s lawsuit against Ripple Labs. The regulatory agency sued Ripple in December 2020, alleging the firm raised $1.3 billion through unregistered XRP (XRP) securities sales.

On March 19, Ripple CEO Brad Garlinghouse announced that the SEC had dropped its appeal against the company and celebrated the move as a “resounding victory” for the firm and the crypto industry.

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Two years earlier, in July 2023, Judge Analisa Torres ruled that XRP is not a security in retail sales, but constitutes one when sold to institutional investors, imposing a $125 million fine on Ripple in August 2024.

On June 12, Ripple and the SEC filed a joint motion to release the $125 million held in escrow accounts to pay for the settlement costs ordered by the court

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SEC/CFTC division addresses “key hurdle” for mainstream crypto adoption

The White House crypto recommendations may also “ease industry concerns over ambiguous securities laws” by providing regulatory boundaries that address a “key hurdle stopping US crypto innovation,” according to analysts from crypto exchange Bitfinex.

“While this advances Trump’s agenda by urging ‘same risk, same rules’ to close oversight gaps and legitimize crypto via legislation like the CLARITY Act, lingering concerns persist,” the analysts told Cointelegraph, adding:

“The report’s push for intensified SEC enforcement against non-compliant firms, absence of details on a promised US Bitcoin reserve, and potential fractures in the crypto community over regulatory stringency, as noted in recent analyses.”

However, the US crypto landscape still needs more recommendations on easing banking custody rules for crypto service providers, and there is “speculation that this is being worked on,” the analysts said.