After years of uncertainty and fragmented oversight followed by months of aspirational rhetoric and informal guidance, the regulatory landscape for digital assets is beginning to take shape, and the CFTC is emerging as the lead regulator for crypto markets. While Congress continues to deliberate over market structure legislation that will formalize the roles of the SEC and CFTC, it is becoming clear that most spot crypto assets will be defined as commodities subject to CFTC jurisdiction, and the agency is already taking significant steps to underscore that this shift is not theoretical, but already underway.

I. The CFTC Takes Affirmative Steps into Crypto Market Oversight

In December, the CFTC announced that U.S. futures exchanges will begin listing spot crypto products for the first time. Although the Commission has long exercised anti-fraud and anti-manipulation authority over spot digital asset markets, it had never directly supervised the trading venues themselves. Allowing spot listings on CFTC-registered designated contract markets brings these products within the agency’s core-principles regime covering surveillance, systems integrity, customer protections, and standards for determining whether products are susceptible to manipulation.

This shift aligns with the September SEC and CFTC joint statement on spot crypto trading, which signaled the agencies’ willingness to collaborate as they kicked off their respective “Project Crypto” and “Crypto Sprint” initiatives in response to recommendations from the President’s Working Group on Digital Assets, and reflects a broader push to move crypto activity onto fully regulated domestic market infrastructure.

Announcement of a second initiative followed shortly after: the launch of a Digital Assets Pilot Program for Tokenized Collateral, designed to establish a workable regulatory framework for derivatives intermediaries that wish to hold or accept digital assets and tokenized real-world assets as collateral. The package includes new guidance on tokenized Treasuries and money market funds, no-action relief allowing Futures Commission Merchants to accept BTC, ETH, and USDC as customer margin during an initial phase-in period, and withdrawal of prior staff guidance that had discouraged use of digital asset collateral altogether.

In effect, the pilot gives derivatives markets – for the first time – a supervised path to incorporate both native digital assets and tokenized traditional instruments into existing margin and settlement workflows, allowing market participants to begin bridging the gap between their traditional assets and those held on-chain.

II. CFTC Leadership Transition Signals Acceleration

Against this backdrop, Michael S. Selig was sworn in on December 22, 2025, as Chairman of the CFTC, following his nomination by President Trump and Senate confirmation earlier in the month. Chairman Selig joins the agency at a pivotal moment, as digital assets move from the periphery of regulatory debate to the center of U.S. financial policy.

Prior to his appointment, Selig served as Chief Counsel to the SEC’s Crypto Task Force and as a senior advisor to SEC Chairman Paul Atkins. In those roles, he played a central part in shaping the SEC’s evolving approach to digital assets, with a particular focus on developing a coherent regulatory framework, harmonizing SEC and CFTC oversight in areas of overlapping jurisdiction, modernizing rules to account for new technologies, and reducing reliance on regulation by enforcement.

Selig also participated in the President’s Working Group on Digital Asset Markets, contributing to the administration’s report on strengthening U.S. leadership in digital financial technology. In his swearing-in statement, he emphasized that Congress is actively considering market structure legislation that could significantly expand the CFTC’s authority, and that the agency is well positioned to establish “commonsense rules of the road” for rapidly evolving markets amid growing retail participation. The timing reinforces the sense that the CFTC’s crypto agenda is entering a new, more durable phase under permanent leadership.

III. Staff Relief for Private Fund Managers Highlights a Coordinated Regulatory Approach

While the CFTC’s public actions have focused on trading venues and market infrastructure, the agency has also taken steps to address regulatory overlap affecting asset managers. In late December, the CFTC’s Market Participants Division issued No-Action Letter 25-50, stating that it would not recommend enforcement action against certain SEC-registered investment advisers that do not register – or that withdraw registration – as commodity pool operators and commodity trading advisors, subject to specified conditions.

The relief applies to advisers managing private commodity pools offered exclusively to Qualified Eligible Persons, effectively reinstating, on an interim basis, the regulatory treatment that existed prior to the 2012 rescission of the former QEP exemption under CFTC Rule 4.13(a)(4). The no-action position remains in effect until the Commission completes rulemaking to formally reinstate, or decline to reinstate, the exemption.

Requested by the Managed Funds Association, the letter reflects a deliberate effort to reduce duplicative regulation for private fund managers already subject to comprehensive oversight under the Advisers Act. Importantly, the relief arrives at a time when Congress is actively considering whether to designate the CFTC as the primary regulator of spot crypto markets, raising the prospect that some advisers could otherwise face expanded CFTC obligations solely as a function of market structure reform.

IV. Congress Continues to Lay the Groundwork for CFTC Spot Authority

In parallel with the CFTC’s actions, Congress continues to advance legislation that would formalize the agency’s role in digital asset markets. Building on the House’s CLARITY Act, which passed with strong bipartisan support, the Senate Agriculture Committee’s bipartisan Boozman–Booker discussion draft represents the most substantive step yet toward a statutory framework dividing authority between the SEC and CFTC.

The draft adopts definitions that closely track the taxonomy categories that have been proposed by SEC Commissioner Hester Peirce and refined by SEC Chair Paul Atkins. Under the proposal, a “digital commodity” would include fungible, peer-to-peer transferable assets on public blockchains that are not securities, bank deposits, payment stablecoins, or pooled investment vehicles. Under this construct, the CFTC would become the primary regulator of digital commodity spot markets and related intermediaries, while the SEC would retain jurisdiction over digital asset securities, primary fundraising, and tokenized traditional securities.

Although certain provisions – particularly those addressing DeFi and non-controlling developers – remain subject to further negotiation, the direction of travel is increasingly clear. Should Congress enact a final market structure framework, the CFTC’s recent actions would likely serve as the foundation for its expanded statutory mandate.

V. Conclusion: What This Means for Market Participants

The CFTC’s trajectory over the past several months reflects more than incremental change. Through concrete market actions, targeted staff relief, and new leadership with deep crypto policy experience, the agency is positioning itself as a central regulator of digital asset markets – particularly for spot trading and market infrastructure.

For crypto market participants and SEC-registered asset managers, several implications follow:

• Expect continued SEC–CFTC coordination: Chairman Selig’s background suggests that joint policy initiatives, aligned guidance, and harmonized oversight will remain a defining feature of crypto regulation.
• Spot crypto markets are moving toward formal CFTC supervision: Trading venues, intermediaries, and liquidity providers should prepare for CFTC-style core principles to apply more broadly as Congress advances market structure legislation.
• Private fund managers may see relief alongside expansion: While the CFTC’s jurisdiction may grow, recent no-action relief indicates sensitivity to regulatory duplication and a willingness to tailor obligations for SEC-regulated advisers.
• Regulatory clarity is likely to improve, but not overnight: The direction of policy is becoming clearer, even as details will continue to evolve through rulemaking and legislation.

As digital assets become embedded within the core of U.S. financial markets, the CFTC’s role is no longer peripheral. Firms that understand this shift and begin aligning compliance, governance, and trading practices accordingly will be better positioned as the next phase of regulation takes shape.