On March 11, 2026, the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) announced a new Memorandum of Understanding (MOU) aimed at coordinating oversight across areas of overlapping jurisdiction, digital assets like crypto.[1] Although the MOU does not create any binding legal obligations or expand either agency’s authority, it signals a significant effort to reduce regulatory fragmentation.

Traditionally, regulation of U.S. financial markets has been divided between the SEC and the CFTC, with the SEC serving as the primary regulator of securities markets and the CFTC overseeing derivatives markets, such as futures and commodities. Over the past several years, however, the rapid growth of digital assets and cryptocurrencies has increasingly blurred these jurisdictional boundaries. Disagreements developed between the agencies over whether certain digital assets should be regulated as securities or commodities, causing significant uncertainty within the sector.

Under former SEC Chair Gary Gensler, the Commission claimed authority over most digital assets through enforcement actions and the Howey test.[2]  This, of course, was not the view shared by the CFTC, who saw them as commodities.  This back-and-forth between the SEC and CFTC led to overlapping investigations, double registrations, and significant compliance burdens.  Consequently, many crypto firms and digital assets headed overseas to jurisdictions with friendlier regulations.  However, the SEC’s stance shifted sharply when President Trump returned to office and appointed Paul Atkins as Chairman.  In a November 2025 speech, Atkins declared that “most crypto tokens trading today are not themselves securities,” signaling a significant departure from the Commission’s earlier approach.  The recently announced MOU follows closely on the heels of that speech and marks another step toward defining the regulatory landscape for digital assets.

 At its core, the MOU establishes a framework for inter-agency cooperation to harmonize the regulatory frameworks for crypto, new derivatives, and other emerging technologies. The following highlights from the MOU illustrate key initiatives that are expected to take effect:

1. Changes to Enforcement. One of the most consequential aspects of the MOU is how it reshapes enforcement cooperation between the two agencies.  The MOU establishes procedures for sharing investigative information, market intelligence, and analytical insights between the two agencies.  This will promote consistent regulatory outcomes while avoiding duplicative or conflicting penalties for firms operating across both securities and commodities markets.
2. Collaborative Rulemaking and Transparency. Rather than operating in silos, the SEC and CFTC will collaborate before issuing rules that may affect shared markets. This is expected to reduce the risk of conflicting securities/commodities regulations in areas where innovation has outpaced existing law. Additionally, both agencies have committed to clarifying definitions of certain digital assets that may still straddle the line between securities and commodities.  As a result, market participants will better understand their compliance obligations.
3. Reducing Regulatory Friction for Dual Registrants. Firms that are registered with both the SEC and CFTC, such as broker‑dealers that also operate futures or derivatives businesses, have faced duplicative examinations, overlapping reporting requirements, and sometimes conflicting regulatory expectations. This dual oversight has often created higher compliance costs and uncertainty regarding which agency’s rules apply in specific situations. Under the MOU, the agencies will aim to streamline and coordinate supervisory and reporting processes for these dual-registered entities.
4. “Fit-for-purpose” Framework. Also a major focus of the MOU is developing a regulatory regime that is tailored to digital assets and other new technologies rather than forcing them into legal frameworks designed for traditional products.

Although the MOU provides a path towards cooperation, it does not rewrite underlying statutes and therefore won’t resolve all ambiguities.  It could, however, serve as the catalyst for more definitive legislative action.  But in the meantime, the MOU provides greater clarity for digital assets that straddle the line between securities and commodities, allowing firms and investors to operate with clearer expectations.  And, if all goes to plan, the MOU will spur greater participation and development in digital assets in the U.S. rather than offshore.

[1] Press Release, SEC and CFTC Announce Historic Memorandum of Understanding Between Agencies (March 11, 2026), https://www.sec.gov/newsroom/press-releases

[2] The Howey test determines whether an asset is an investment contract and thus subject to U.S. securities regulations: (1) the investment of money by an investor, (2) the investment must be made in a common enterprise, (3) there must be a reasonable expectation of profits, and (4) those profits must be derived primarily from the efforts of others, such as the promoter or a third party. SEC v. W.J. Howey Co., 328 U.S. 293 (1946).