Former SEC, CFTC Officials Urge Lighter Touch to Bring Crypto Perps Trading Onshore
While crypto market structure legislation sits in summer recess limbo, the SEC and CFTC are getting a head start on writing the rules for the $2.5 trillion industry.
Both agencies are pressing ahead with several crypto-related initiatives, including a fresh look at derivatives and a rewrite of the SEC's crypto custody rules.
First up: Derivatives.
In June, the agencies asked for public input on how swaps, security-based swaps, and novel or emerging products should be defined and where SEC and CFTC jurisdiction should begin and end.
Now, a bipartisan group of former SEC and CFTC officials is weighing in, warning that getting those lines wrong could continue driving lucrative markets overseas.
In a new comment letter, former CFTC Chairman Chris Giancarlo, former CFTC Commissioners Brian Quintenz and Sharon Brown-Hruska, former SEC Commissioner Steven Wallman and former SEC Chief Economist Chester Spatt argue that similar risks should face similar regulatory treatment and overlapping rules shouldn't pile on additional compliance costs.
The bipartisan makeup is notable at a time when neither agency has bipartisan representation. The signatories argue these aren't inherently partisan questions, pointing to longstanding common ground between commissioners of both parties on protecting investors and keeping U.S. markets competitive.
The issue is particularly relevant for crypto as the CFTC looks to bring perpetual futures onshore, a market some signatories have individually argued U.S. regulation has largely driven overseas. Earlier this month, President Donald Trump said CFTC Chairman Michael Selig is working to bring popular offshore perps platform Hyperliquid into the United States.
Prediction market platform Kalshi, which began offering crypto perps earlier this year, estimates offshore perpetuals trading topped $90 trillion in 2025, up from around $28 trillion two years earlier. Kalshi sponsored the letter by retaining law firm Bellementis PLLC to help with drafting, though the signatories say they weren't compensated and the company had no say over its contents.
The core message: regulation can push trading elsewhere, but it doesn't make the demand or the risk disappear. And time is of the essence.
"The $90 trillion offshore perpetuals market isn't a mystery to solve, it's a market waiting for a sensible U.S. rulebook," Giancarlo told Crypto In America. "If we calibrate federal regulation to actual risk instead of maximum burden, that liquidity comes onshore. Every year we wait, it gets harder to bring to America."
Over at the SEC, custody is back in focus.
Last week, the SEC sent a planned rewrite of its custody rules for investment advisers and investment companies to the White House Office of Information and Regulatory Affairs (OIRA) for review.
The planned rule is expected to tackle a question the crypto industry has sought clarity on for years: How can SEC-regulated investment firms provide custodial services for digital assets while complying with federal securities laws? This is particularly relevant for investment advisers, who are required to use "qualified custodians" which meet strict standards for safeguarding and accounting related to customer assets.
The text isn't public yet, so details on which firms could qualify as crypto custodians or what requirements they would have to meet remain unclear. What is clear is that the SEC says it wants to clarify the rules around crypto custody while stripping out provisions it considers outdated.
That marks a notable change in direction from the agency's previous attempt to tackle the issue three years ago, when then-Chairman Gary Gensler proposed a sweeping "safeguarding" rule that would have expanded existing adviser custody requirements beyond funds and securities to virtually all client assets, including crypto.
The Atkins SEC scrapped that proposal last year.
Meanwhile, the SEC's "Reg Crypto" proposal, which would establish new rules for certain crypto asset offerings, has officially hit the Federal Register and is open for public comment until October 20.
-- Price
This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.
You may also like

a16z: August RWA perpetual contract trading volume reaches $117.3 billion, on-chain trading share rises to 86%

Dave Weisberger Discusses Bitcoin FOMO and Collateral Treatment

Altcoin demand meets $18B threat as flows move into RWA perps as just 19% of traders keep alts

Can Kraken's Parent Company Open the Door for Hyperliquid to Enter the U.S. Market?

AI and Crypto: Why BlackRock Sees a Major Convergence

What is Travix? An on-chain omnibroker combining AI trading and blockchain verification

Hyperliquid open interest reaches record $18 billion: What’s driving activity?

Coinmetrics Report: The Competition of Tokenized Stocks and Their Future Development Path

HyperLiquid Launches Perpetual Contracts for Chinese Assets, Challenging Global Financial Regulation

Kinetiq Hyperliquid L2 Elysium Testnet Launched

Crypto: Kalshi accused of inflating its volumes with thousands of identical orders

The Holy Grail of DeFi in My Heart

Hyperliquid Opens Market for Bitcoin Volatility

Hyperliquid Monthly Active Addresses Reach 291,900

L2 Rakes in Profits While Ethereum Becomes a 'Cheap Landlord'

Hyperliquid posts strong $429M revenue, leads 2026

Blackboard to participate in NEXUS2140 expo in Incheon on Sept. 22-23

The Myth of Zcash's Hundredfold? No, It's an Idealistic 'Revenge'

AI Infrastructure Investment Surpasses Housing, U.S. Economic Engine Shifts Gears | Rewire News Briefing

Why is Cryptocurrency Still Rising? A Conversation on Bull Markets, Regulation, Interest Rates, and Stock Tokenization

Important News from Last Night and This Morning (September 19 - September 20)

Hyperliquid's Path to the U.S. Revealed: Kraken's Parent Company Accesses via HIP-3, Restrictions Remain Stringent

Garrett Jin Discloses Losses of Over 100,000 BTC Held by Whale Entity

USDT in Wallets May Be Blocked. What to Do and How to Store Them in Russia

Switchboard Announces Cessation of Operations

Fake AI trading bot tutorials steal 274.6 ETH from 224 victims

Hyperliquid Launches Manual Lending Feature with $269 Million in Assets Loaned Out

BitGo adds ex-Exodus executive as compliance chief

CZ's Genius.fun Leading Meme Community's Reverse Acquisition of a Public Company?








