Project Crypto revives the SEC and CFTC's 1980s playbook for regulating new markets
There's a strong historical basis for the two financial regulators to decide, together, how to divide up their responsibilities to crypto market participants.
“Working together with common purpose, we can deliver clearer guidance, consistent standards, and a regulatory framework that reflects how markets actually function instead of how they used to.” —SEC Chair Paul Atkins, opening remarks at the joint SEC-CFTC harmonization event, January 29, 2026.
America’s two financial regulators look set to come to an understanding around regulating the cryptocurrency industry.
Notably, the agencies have done this before.
“In the 80s, there was something called the Shad-Johnson Accord,” Johanna Collins-Wood, general counsel at Bitwise Asset Management, told Front Stage Exit. Bitwise is best known for making a number of crypto-based ETFs, including being among the first to market with a bitcoin ETF.
“In the 1970s and 1980s you had a proliferation of new products,” she said, mainly new futures offerings1 against equities. Various accounts indicate it led to a real turf battle, but the accord between the agencies’ two chiefs settled most of the uncertainty.
Under the accord, the approach worked well enough that “it later became codified law through congressional action,” she said.
But now the cryptocurrency market has come along and created a new fuzzy zone. Since the initial coin offering boom of 2017, regulators and lawmakers have been going round-and-round with the industry on which digital assets are securities and which are not, but 2026 looks set to be the year that D.C. sorts this out — whether Congress or the agencies do it.
In terms of existing frameworks for commodities and securities, digital assets have been flummoxing. Such that the turf battle was out in the open during the administration of President Joe Biden. We had an SEC chair who argued almost all of crypto was unregistered securities trading and a CFTC chair urging Congress to clarify that — actually — lots of digital assets were not securities, but they still needed to be traded on supervised markets.
It matters because many of these assets would not be usable for their intended purpose if they were regulated as securities — never mind the expense of meeting the high compliance burdens.
The Biden-era turf battle reflected an administration that dithered on this topic — that didn’t seem to want to deal with it at all, in fact. The Trump administration is not dithering.
Project Crypto, initiated by the SEC and joined by the CFTC, aims to harmonize the treatment of this new category of assets.
So, last week, the two agencies held a summit in DC, at which new CFTC Chair Michael Selig made his first public comments since taking over from interim chair, Caroline Pham (Selig previously served as the SEC’s lead crypto attorney).
Selig namechecked the 80s agreement, before saying:
“Today, commodity markets are once again experiencing a period of rapid transformation. ...
“By applying clear rules, principles-based oversight, and harmonizing with fellow regulators, the Commission can help ensure that the next generation of commodity markets develop onshore”
Clarifications
There are two moving pieces here: updated rules from each agency on digital assets and the procedures for how those agencies collaborate on oversight.
On the rules themselves, the SEC put out its security token taxonomy guidance last week. It came from three different divisions of the agency.
Tokenized equities, in particular, have been controversial over the last year. There’s been offerings putting out products for equities that aren’t publicly traded yet. There’s been permissionless tokenized equities that exist in a (dark) grey area. Then there are projects like Dinari, which have secured approval to issue actual equity as tokens — with all the rights that stocks have in your Schwab account.
The new taxonomy suggests the SEC is ready to give firms what they need to design products with guidelines in mind. That marks a change from the prior administration which preferred to let companies go to market and then see their designs tested in court.
Lower duplication
The Gensler SEC took an oblique approach. Many in the industry have said they appreciate working with an agency that leads with guidance rather than lawsuits.
However, when regulators start talking about making compliance easier, it’s natural for the public to worry that this means lower safeguards.
But Collins-Wood provided a different perspective on what we might see from harmonization between these agencies.
By way of example, she explained that Bitwise is overseen by parts of both the CFTC and the SEC. In order to meet their compliance obligations, the company keeps two separate manuals for making their reports to each of the agencies.
“We’re not able to port things or refer over from one manual to the other, because the requirements are often just slightly different enough,” she said.
They believed they need to do it that way to make sure they don’t miss any of the specifics required by each agency. “There’s maybe slight differences in how things have to be recorded or how things have to be managed for those two regimes.”
During the events last week, the agency chiefs acknowledged that they could be imposing undue burdens, so they spoke about moving to “substituted compliance.”2 We don’t know just what that means yet, but it could be that firms will mostly only have to deal with one of the two agencies.
Selig said:
“Fragmented oversight imposes real economic costs—raising barriers to entry, reducing competition, increasing compliance expenses, and encouraging regulatory arbitrage rather than productive investment.”
Collins-Wood finds the direction encouraging. “I think the coordination piece is really important,” Collins-Wood said. “The concept of a fragmented oversight being a harm to investors is a framing we haven’t heard recently.”
“I think this will be fun.”
The limits of success
The question on the minds of market observers must be: Will regulatory harmonization at the agencies be enough if Congress can’t agree on legislation around how to structure the cryptocurrency markets?
Collins-Wood agreed with most others in the industry, that legislation would bring much more permanence to any kind of policy.
However, “the regulatory agencies certainly have broad discretion, and clearly intend to use it. And there’s something to be said for precedent,” she noted. “Once that gets started it is hard for a later administration to turn the battleship.”
But it can happen.
And getting to a rulemaking may not be as easy as it looks. For example, the SEC has missed its self-imposed deadline for creating an innovation exemption for crypto firms, and Atkins declined last week to estimate when such a program might roll out.
Tick-tock
Beyond innovating on procedure, the agencies have new rules to write. It could easily be a year before final rules get promulgated.
Draft rules may be circulated fairly soon, but it’s likely there will be a long comment period, so that the industry has time to weigh in.
The agencies are likely to take their time responding to comments in detail. Either way, Atkins has said that he’s determined to act on these issues one way or another since the beginning of his tenure as chair.
“The future of finance will be built somewhere,” Atkins said in his opening remarks, “Through Project Crypto, we can help to ensure that it is built here, under rules that protect investors, support innovation, and cement America’s leadership.”
Blockbuster team-up
The CFTC’s Philip McBride Johnson and the SEC’s John S. R. Shad ironed out their agreement about stock index futures all the way back in 1981. Forty-five years later, their successors are working on a new one.
During last week’s event, the two leaders both spoke about a memorandum of understanding between the agencies. Selig said, during the fireside led by Crypto in America, that it will formalize how the two agencies interoperate.
“I also think getting the staffs working together is going to have a real impact,” he added, “That’s going to make us all better as agencies, as lawyers and as market specialists.” He thinks the document that makes that happen will eventually be seen as “historic.”
“The more we can knit things together,” Atkins said during the fireside, “that will help make it that someone would have to explain why you’re going to have to bifurcate something in the future.”
“I think in particular Atkins is looking back at that [accord], and saying, ‘This was really successful,’ and that sort of set the ground rules for how the SEC and the CFTC operated for now almost 40 years,” Collins-Wood conjectured.
“I think this will be fun,” Atkins said.
“Futures” are agreements to buy something or sell something on a certain date, unlike options, which give the buyer the right to buy or sell something — but with an option an investor can just let it expire.
Notably, “substituted compliance” typically refers to arrangements where the U.S. trusts foreign regulators to keep an eye on their companies operating in the U.S.