Former SEC, CFTC Officials Urge Lighter Touch to Bring Crypto Perps Trading Onshore

In brief

• The SEC and CFTC are moving on crypto rulemaking while market-structure legislation sits in summer recess, with a joint look at how derivatives like swaps and perpetual futures should be defined and where each agency's jurisdiction begins.
• A bipartisan group of former SEC and CFTC officials—including Chris Giancarlo and Brian Quintenz—argued in a Kalshi-sponsored comment letter that similar risks deserve similar treatment, warning that miscalibrated rules keep driving trading overseas.
• The SEC separately sent a rewrite of its crypto custody rules to the White House for review, aiming to clarify how regulated advisers can custody digital assets.

While crypto market structure legislation sits in summer recess limbo, the SEC and CFTC are getting a head start on writing the rules for the $2.5 trillion industry.

Both agencies are pressing ahead with several crypto-related initiatives, including a fresh look at derivatives and a rewrite of the SEC’s crypto custody rules.

First up: Derivatives.

In June, the agencies asked for public input on how swaps, security-based swaps, and novel or emerging products should be defined and where SEC and CFTC jurisdiction should begin and end.

Now, a bipartisan group of former SEC and CFTC officials is weighing in, warning that getting those lines wrong could continue driving lucrative markets overseas.