Staff from the U.S. Securities and Exchange Commission’s Division of Trading and Markets and the U.S. Commodity Futures Trading Commission’s Divisions of Market Oversight and Clearing and Risk published a joint staff statement launching a cross-agency initiative under SEC Project Crypto and the CFTC Crypto Sprint to coordinate the process for enabling trading of certain spot crypto asset products. The statement sets out the staff’s view that existing law does not prohibit SEC- or CFTC-registered exchanges from facilitating trading in leveraged, margined, or financed spot retail commodity transactions on digital assets, while noting it is a staff view with no legal force or effect. The staff highlighted that, absent an exception or relief, the Commodity Exchange Act requires certain leveraged, margined, or financed retail commodity transactions to be conducted on a CFTC-registered designated contract market or foreign board of trade, and noted an exception for transactions listed on an SEC-registered national securities exchange. It also indicated it will promptly review related filings and requests from designated contract markets, foreign boards of trade, and national securities exchanges, and flagged key operational considerations for market participants, including margin, clearing and settlement arrangements (including clearinghouse partnerships with custodians), information sharing for market surveillance, public dissemination of trade data, applying fair and orderly market principles, and maintaining investor and customer protections alongside technological innovation. Market participants preparing registrations, proposals, or requests for appropriate relief were invited to engage with SEC or CFTC staff as needed.

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