SEC, CFTC Seek Public Comment on Harmonized Framework for BTC, ETH, XRP Futures

The U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) have jointly issued a request for public comment on potential approaches to harmonize regulatory frameworks for portfolio margining across securities, security-based swaps, futures, swaps, and related positions. The comment period will remain open for 60 days after publication in the Federal Register.

The move comes shortly after the CFTC approved crypto perpetual futures for Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), and HYPE. Kalshi, which received CFTC approval to offer these products, saw over $1 billion in trading volume within two weeks of launch. The SEC and CFTC aim to evaluate whether greater coordination in portfolio margining requirements can improve risk management efficiency, reduce market fragmentation, and enhance consumer protections.

This coordinated effort follows broader regulatory discussions. The SEC and CFTC have been working to clarify definitions of derivative products, including swaps and security-based swaps. The agencies stated that the request for comment will help assess whether aligning margining rules could unlock liquidity currently trapped in separate accounts.

SEC Chair Paul Atkins commented, “Further harmonizing the SEC CFTC framework will ensure that jurisdictional overlap does not stifle innovation and efficiency. Cross-margining offers a clear opportunity to unlock liquidity that remains frozen in separate accounts.” CFTC Chair Michael Selig added that fostering enhanced cooperation on portfolio margining “promises to unlock untapped capital while ensuring a more robust risk management framework and market protections.”

The CFTC is currently facing a lawsuit from the CME over its approval of crypto perpetual futures. The CME argues that these products are swaps, not futures contracts, and that the regulator approved them incorrectly. Despite the legal challenge, demand for these futures has been significant, with Kalshi’s products recording over $1 billion in volume.

The public comment period will allow market participants to provide feedback on potential changes to margining rules that could affect trading in BTC, ETH, and XRP futures.

Source: https://coingape.com/sec-cftc-seeks-public-comment-on-harmonized-framework-for-btc-eth-xrp-futures/