Commodity Futures Trading Commission (CFTC) Chairman Michael S. Selig used his first public remarks to set out a joint CFTC-Securities and Exchange Commission (SEC) “Project Crypto” work programme aimed at clarifying jurisdictional lines and updating rules for crypto asset markets using existing authorities. The agenda spans a proposed crypto asset taxonomy, tokenized collateral, perpetual derivatives, regulatory treatment of on-chain software and wallets, retail leveraged crypto trading, cross-agency harmonization, and a reset of the CFTC’s approach to event contracts. Under Project Crypto, staff were directed to work with the SEC on a clear crypto asset taxonomy and to consider joint codification of a framework that would treat digital commodities, digital collectibles and digital tools as not being securities, as an interim measure while Congress finalizes legislation. The CFTC will also develop rules to enable additional forms of eligible tokenized collateral, pursue a framework to “onshore” true perpetual derivatives and other novel products, and explore safe harbors for software developers and users, including whether an innovation exemption could be appropriate in certain circumstances. For leveraged, margined or financed retail commodity transactions in crypto, staff were instructed to draft rules clarifying when off-exchange activity may rely on an “actual delivery” exception, codify requirements for designated contract markets (DCMs) that offer these transactions, and explore a new DCM registration category tailored to retail leveraged crypto trading. On harmonization, the CFTC will work with the SEC on aligning requirements and examining substituted compliance to reduce duplicative compliance. On prediction markets, Selig directed staff to withdraw the 2024 event contracts proposal that would prohibit political and sports-related event contracts and to withdraw the 2025 staff advisory cautioning registrants about sports-related event contracts due to ongoing litigation. Staff were also told to draft an event contracts rulemaking to establish clearer standards, reassess the Commission’s participation in pending federal court matters, and work with the SEC on a joint interpretation of Title VII definitions to better delineate certain commodity and security options, CFTC-regulated swaps, and SEC-regulated security-based swaps.
Commodity Futures Trading Commission 2026-01-29
Commodity Futures Trading Commission chair announces SEC partnership on Project Crypto and directs staff rulemakings on crypto markets and event contracts
CFTC Chairman Michael S. Selig announced "Project Crypto," a joint CFTC-SEC initiative to clarify jurisdiction and update crypto asset market rules. It includes developing a crypto asset taxonomy, tokenized collateral rules, and a framework for perpetual derivatives, while exploring safe harbors for developers. The CFTC and SEC will also harmonize requirements and reassess event contracts, withdrawing proposals on political and sports-related contracts.