SEC vs CFTC: The regulatory shift in crypto oversight

The SEC pivot and Gensler’s departure

Gary Gensler resigned as SEC Chair effective January 20, 2025, which left Paul Atkins to lead the agency. I see the transition in fiscal year 2025 enforcement data, where the SEC filed 456 enforcement actions and obtained $17.9 billion in monetary relief, whereas fiscal year 2024 saw 431 actions and $8.2 billion in relief. Atkins redirected staff toward misconduct that inflicts the greatest harm, specifically fraud and market manipulation. Chairman Paul Atkins noted that the SEC is no longer the "securities and everything commission." On March 17, 2026, the SEC issued interpretive guidance to clarify that certain assets like digital commodities, digital collectibles, and digital tools fall outside the scope of federal securities laws. The commission also rescinded its "no-deny" settlement rule on May 18, 2026, to allow more flexibility when settling enforcement actions. This rescission means the SEC no longer prevents defendants from contesting allegations in settlement agreements. The guidance also explains how a non-security crypto asset becomes subject to an investment contract under the Howey test when an issuer induces an investment of money in a common enterprise. The guidance also states that, under specific circumstances, certain airdrops of securities do not involve the offer and sale of securities. This follows the SEC’s previous position in a 2018 enforcement case. Additionally, the US District Court in North Texas rejected the SEC’s Dealer Rule, which previously sought to bring DeFi and crypto activity under the SEC’s "dealer" definition. Critics noted the rule could have brought nearly all DeFi activity within the SEC’s definition and required registration. The SEC’s enforcement success was high, as it settled or won 95 of 116 cases involving 260 different companies through June 2024.

Stablecoin rules and the CLARITY Act

The GENIUS Act, enacted in July 2025, establishes the framework for payment stablecoins. Treasury Secretary Scott Bessent moves to implement this framework to keep America the crypto capital of the world. The act sets an expected effective date of January 18, 2027, for certain issuance requirements. Digital asset service providers cannot offer or sell any payment stablecoins to persons in the United States starting on July 18, 2028, unless the stablecoins come from a licensed issuer.

The Senate Banking Committee advanced the CLARITY Act by a vote of 15-9 on May 14, 2026. This legislation would grant the CFTC exclusive jurisdiction over spot markets for digital commodities while the SEC retains authority over assets that constitute securities. The bill also establishes a registration regime for digital commodity exchanges, brokers, and dealers under the CFTC. The current Senate version also includes a DeFi trading protocol framework and an insolvency safe harbor for digital commodity transactions. The GENIUS Act specifically requires that issuers maintain reserves on at least a 1-to-1 basis. While the GENIUS Act allows for demand deposits to be held at regulated foreign banks, the STABLE Act does not mention this. Does the concentration of power in the CFTC through the CLARITY Act undermine the SEC’s ability to protect retail investors?

CFTC jurisdiction gains ground

The CFTC gains the advantage in the jurisdictional battle because the CLARITY Act pushes the spotlight toward commodity spot markets. On March 11, 2026, SEC Chairman Paul Atkins and CFTC Chairman Michael Selig signed a Memorandum of Understanding to coordinate examinations and reduce duplicative reporting for dually registered firms. This agreement follows the CFTC’s decision to rescind its "no-deny" rule on June 3, 2026. While the SEC focuses on individual liability and fraud, the CFTC maintains control over Bitcoin as a commodity. Each CME Bitcoin futures contract covers five BTC. The CFTC updated its enforcement priorities to include insider trading and willful Anti-Money Laundering violations. The agency moved to two mission-driven task forces: a Complex Fraud Task Force and a Retail Fraud and General Enforcement Task Force. In May 2026, the CFTC released a report stating it took decisive steps to end the era of regulation by enforcement. You should watch how the Senate reconciles the CLARITY Act with the version from the Senate Agriculture Committee before the end of the year.