The U.S. Securities and Exchange Commission and Commodity Futures Trading Commission announced a joint review of crypto derivatives regulations, opening a 60-day public comment period on portfolio margining requirements. The move comes after the approval of regulated crypto perpetual futures in the United States.
Joint Call for Public Input
In a joint press release, the agencies seek feedback on aligning portfolio margining across securities, security-based swaps, futures, swaps, and related positions. Comments will remain open for 60 days after publication in the Federal Register. The review aims to determine whether closer coordination can improve risk management, reduce market fragmentation, and strengthen consumer protections. Crypto derivatives and tokenized products are expanding rapidly, prompting the regulatory reassessment.
Kalshi received CFTC approval to list perpetual futures tied to Bitcoin, Ether, XRP, and HYPE, while platforms like Hyperliquid have also expanded access to tokenized-securities-linked perpetuals. SEC Chair Paul Atkins said better agency coordination can prevent overlapping responsibilities from slowing innovation. "Cross-margining offers a clear opportunity to unlock liquidity that remains frozen in separate accounts," he added, encouraging market participants to provide feedback.
CFTC Chair Michael Selig supported the initiative, stating portfolio margining cooperation "promises to unleash untapped capital while ensuring a more robust risk management framework and market protections."
Derivatives Definitions Under Review
Earlier this week, the two agencies separately sought public comment on how U.S. rules define swaps, security-based swaps, and related derivatives under Title VII of the Dodd-Frank Act. The SEC and CFTC noted that market structure and trading practices have changed since those rules were adopted, raising questions about whether existing definitions still fit today's derivatives markets. The consultation also covers swap exclusions, mixed swaps, jurisdictional issues, alternative compliance, and new financial products. Responses will help build a common regulatory record for future interpretations and court proceedings.
Legal Battles Intensify Alongside Rulemaking
The CFTC faces multiple lawsuits related to crypto derivatives and prediction markets. This week, the CFTC sued Kentucky in federal court after the state sought to enforce its gaming laws against prediction market operators like Kalshi and Polymarket. The regulator argues the Commodity Exchange Act gives it exclusive authority over federally regulated futures, options, and swaps, while Kentucky claims sports-linked event contracts fall under state gambling law.
Meanwhile, CME Group continues its legal challenge against the CFTC over the approval of crypto perpetual futures. CME alleges that Kalshi's perpetual crypto contracts should be regulated as swaps, not traditional futures, and that the regulator approved them without following the Dodd-Frank framework. The classification matters because swaps and futures follow different rules for clearing, reporting, execution, and oversight. The parallel consultations on derivatives definitions and portfolio margining may shape how future crypto products are supervised in regulated U.S. markets.