Regulation by Rulemaking: SEC and CFTC Continue Piecing Together a Crypto Asset Framework (FCTM) - Lowenstein Sandler LLP

The development, as summarized by Lowenstein Sandler LLP, points to a regulatory approach built through rulemaking rather than sweeping legislation. In practice, that means the SEC and CFTC are assembling a crypto asset framework piece by piece, using individual rules and guidance to define how digital assets are treated. For market participants, the key takeaway is incremental: each rulemaking adds a layer to the framework, and the overall picture emerges from the accumulation of these steps rather than from a single statute.

The market relevance lies in how this method shapes expectations. Rule-by-rule regulation can create clarity in specific areas while leaving others unsettled, and firms may need to track developments across two agencies with distinct mandates. The SEC and CFTC each bring different statutory responsibilities to the table, so the division of oversight is itself part of what is being pieced together.

What to watch: further rulemaking from either agency, how the two frameworks fit together, and whether gaps or overlaps emerge as the structure takes shape.