U.S. Cryptocurrency Oversight Faces Uncertainty as Lawmakers Divide Authority Between SEC and CFTC

The U.S. Securities and Exchange Commission (SEC) is stepping up its efforts to clarify how cryptocurrencies linked to investment contracts are regulated. Chairman Paul Atkins stressed the importance of striking a balance between fostering innovation and safeguarding investors. During remarks at a Federal Reserve Bank of Philadelphia event, Atkins presented a plan for exemptions and simplified procedures aimed at reducing regulatory ambiguity in the blockchain sector, according to a report by

. His comments underscore the SEC’s intention to clearly define its regulatory boundaries, especially for digital assets that may no longer qualify as investment contracts even if they continue to be traded on blockchains.

At the same time, the U.S. Senate Agriculture Committee has put forward a bipartisan draft bill designed to overhaul crypto regulation by differentiating between “digital commodities” and “investment contracts,” as outlined by

. The legislation, introduced by Senators John Boozman (R-AR) and Cory Booker (D-NJ), would give the Commodity Futures Trading Commission (CFTC) oversight of digital commodities such as and , while the SEC would continue to regulate investment contracts, according to . This proposed change aims to provide financial institutions with a more transparent regulatory environment, allowing them to interact with crypto assets without the uncertainty that has previously slowed market development, as reported by .

The draft bill also calls for the SEC and CFTC to work together, marking a shift from the SEC’s previous leading role in crypto enforcement. Under the proposal, the CFTC would have expanded powers to register trading venues, enforce disclosure requirements, and collect fees from crypto businesses to support regulatory activities, as noted by

. This adjustment answers industry demands for clearer regulatory guidelines, with groups like the Blockchain Association describing the draft as a “move toward practical, well-defined rules,” as reported by .

In his address, Atkins highlighted the SEC’s intention to exercise restraint in its regulatory scope, specifically excluding network tokens, digital collectibles, and “digital tools” from its definition of securities. He made it clear that while the SEC will maintain oversight of tokenized securities, it does not want to hinder innovation by limiting where these assets can be traded. This approach is consistent with the Senate bill’s plan for a dual regulatory system, where the CFTC manages commodities and the SEC focuses on investment contracts, as reported by

.

Recent tax policy changes are also encouraging more institutional involvement in crypto. The U.S. Treasury and IRS have released Revenue Procedure 2025-31, which permits crypto ETFs and trusts to stake digital assets and distribute staking rewards to investors. This safe harbor provision addresses previous legal uncertainties, allowing regulated funds to participate in proof-of-stake networks like

, as reported by . Analysts believe this development will drive significant institutional investment, with expectations of increased assets under management related to staking.

The combination of these regulatory moves—greater SEC clarity, new Senate proposals, and tax updates—marks a turning point for the crypto sector. Although there are still hurdles, such as finalizing rules for market structure and tackling anti-money laundering issues, as reported by

, bipartisan support is building for a unified U.S. crypto regulatory framework. As policymakers and regulators continue to shape these measures, the industry’s capacity to draw institutional investors and encourage innovation will depend on the consistency and reliability of oversight.