SEC and CFTC Overhaul Crypto Rules Amid Concerns of Duplicative Regulation

US regulators are revising rules related to cryptocurrencies as the SEC and CFTC speed up work on overhauling rules for crypto derivatives and custody. Former officials have raised concerns about duplicative regulation, arguing that it could raise compliance costs.

The SEC and CFTC began seeking public input in June on definitions for new derivatives such as swaps, security-based swaps, and perpetual futures, as well as jurisdictional boundaries. A joint comment letter from former senior officials Chris Giancarlo, Brian Quintenz, Sharon Brown-Hruska, Steven Wallman, and Chester Spatt argued that regulation should be applied in line with risk levels.

The CFTC is also pushing to bring crypto perpetual futures trading into the US market, with Commissioner Michael Selig working to bring offshore platform Hyperliquid into the country. Prediction market platform Kalshi launched a crypto perpetual futures product earlier this year and estimated that offshore perpetual futures trading volume in 2025 exceeded $90 trillion.

The SEC has separately begun revising its crypto custody rules, asking the Office of Information and Regulatory Affairs under the White House to review a proposed revision that would clarify how investment companies overseen by the SEC can provide digital asset custody services while complying with federal securities laws.