Key takeaways
- The SEC regulates securities, including investment contracts, mainly through registration and disclosure. The CFTC regulates commodity derivatives such as futures, options and swaps.
- For spot crypto markets, the CFTC's power is narrow: it can police fraud and manipulation but does not have broad day-to-day oversight of spot trading, according to The Block's July 2026 explainer.
- No statute draws the line between the agencies. Court rulings and enforcement filled the gap, and the CLARITY Act would have written it into law before its Senate cloture vote failed 49-50 on September 15, 2026.
- On March 17, 2026 the two agencies issued a joint interpretation sorting crypto assets into five categories. Only “digital securities”, assets that meet the Howey test, are treated as securities.
| Aspect | SEC | CFTC |
|---|---|---|
| What it regulates | Securities, including “investment contracts,” and the markets and intermediaries around them. | Commodity derivatives: futures, options and swaps. |
| Main tool | Registration and disclosure by issuers, plus anti-fraud and anti-manipulation enforcement. | Oversight of derivatives exchanges and intermediaries, plus enforcement against fraud and manipulation. |
| Legal test | The Howey test: money invested in a common enterprise with an expected profit from others' efforts. | Whether an asset is a basic, interchangeable commodity whose price is set by the market. The legal definition is broad. |
| Spot crypto markets | Covers tokens that are sold as investment contracts. Does not treat bitcoin as a security. | Fraud and manipulation enforcement only. No broad registration regime for spot crypto exchanges today. |
| Derivatives and funds | Spot crypto ETF shares trade on securities exchanges, so the SEC oversees them. | Bitcoin and ether futures trade on CFTC-overseen exchanges such as CME. |
| Bitcoin and ether | Has never treated bitcoin as a security. Ether is widely treated as a commodity but debated more. | Treats both as commodities for derivatives purposes. |
| 2026 rulemaking | Proposed “Regulation Crypto Assets” in August: a $5 million, four-year startup exemption and a $75 million per-12-month fundraising exemption. Comments were due October 20. | October 5 advance notice on “Regulation CTX” and “Regulation CAM” for retail crypto transactions and exchanges. Comments due about December 14. |
| Current chair | Paul Atkins. | Michael Selig. |
Sources: The Block's “SEC vs CFTC: Who Regulates Crypto?” (July 16, 2026, updated July 28); Croke Fairchild's client alert on the March 17, 2026 SEC-CFTC joint interpretation; the CFTC's Release 9307-26; ChainBrief reporting on the agencies' proposals.
Two tests, two ways of asking the same question
The SEC starts with a question about the deal: did people put money into a common enterprise expecting profit from someone else's work? If so, under the Howey test from a 1946 Supreme Court case, it is an investment contract and therefore a security. The CFTC starts with a question about the asset: is it a basic, interchangeable good whose price is set by the market? For crypto, the Howey question often turns on whether buyers depend on a central team. If a network is decentralized, the argument that its token is a security weakens.
Why the line blurs
A single token can look different over time. Early sales to fund a project may resemble a securities offering, while the token of a mature, decentralized network may look like a commodity. The same token can even be treated differently depending on how it was sold: in SEC v. Ripple Labs, the court found that certain direct institutional sales of XRP were securities transactions while public exchange sales were not. Utility and governance tokens blend investment and consumption features, which makes them harder to place.
What the March 2026 joint interpretation did
On March 17, 2026, the SEC and CFTC issued a joint interpretation sorting crypto assets into five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. Per a law firm's summary, only digital securities, assets that meet the Howey analysis, are identified as securities. The interpretation also addressed staking, finding that protocol-level mining and staking generally fall outside securities treatment, with exceptions for arrangements such as a custodian that guarantees reward amounts. It describes how existing law applies rather than creating new law, and an interpretation can be revised by a later commission more easily than a statute can.
What is pending
The CLARITY Act would have defined “digital commodities” and placed their spot markets under CFTC authority, while leaving tokens sold as investment contracts with the SEC. Its Senate cloture vote failed 49-50, and the Senate returns to legislative business on November 9. In the meantime both agencies are writing rules: the SEC's Regulation Crypto Assets (see our report on the proposal) and the CFTC's notice on Regulation CTX and CAM (see our report on the notice). The tradeoff, as we explained in our piece on the agencies acting alone, is that rules written under existing authority are faster than a statute but easier for courts or a future commission to change.
How to use this comparison
When a headline says “the SEC” or “the CFTC” did something, ask three questions. Is it about the asset, the sale, or a trading venue? Is it spot or derivatives? And is it a rule, an interpretation, or a single enforcement case? For background on each agency, see our profiles of the SEC and the CFTC, and the glossary entries for the CLARITY Act and cloture. This is general information, not legal advice.
Frequently asked
Is bitcoin a security?
The SEC has never treated bitcoin as a security, and it is generally treated as a commodity, with the CFTC overseeing its derivatives. The joint March 2026 interpretation classifies fungible assets whose value comes from market forces as digital commodities.
Who regulates a crypto exchange?
It depends on what it does. Venues that trade tokens sold as securities fall under the SEC. The CFTC oversees derivatives exchanges, but has only fraud and manipulation authority over spot trading. A federal registration regime for spot exchanges is among the things the CLARITY Act and the CFTC's pending rulemaking address. Many exchanges also hold state licenses.
Would the CLARITY Act have ended the overlap?
It would have written the boundary into law by defining digital commodities and a path for assets to move from SEC to CFTC oversight as networks decentralize. The Senate cloture vote failed on September 15, so the boundary continues to be set by agency interpretation, rulemaking and court decisions.
Further reading
- The Block: SEC vs CFTC: Who Regulates Crypto?
- Croke Fairchild: SEC/CFTC joint interpretation on crypto asset classification
- CFTC: Release 9307-26, advance notice on Regulation CTX and CAM
- ChainBrief: What is “exemptive relief”?
More comparisons: GENIUS Act vs. MiCA · Trust vs. bank charter vs. state license · Spot ETF vs. staking ETF · Hardware vs. software vs. custodial wallets · All comparisons · Glossary