Securities Regulation Daily Wrap Up, CFTC NEWS AND SPEECHES—Committee participants hail CFTC’s harmonization and clarification efforts as digital markets evolve, (Aug 21, 2026)

By Rebecca E. Hoffman, J.D.

CFTC Innovation Session: CEOs of digital finance entities provide the Commission with their views on resolving legal uncertainty.

The CFTC’s Innovation Advisory Committee, formerly the Technology Advisory Committee, conducted a session on crypto assets during its August 20 meeting, the first since the relaunch, attended by a phalanx of industry leaders who would love to see movement toward regulatory clarification, as well as collaboration between regulators and innovators to keep entrepreneurial pathways open and thriving.

Kicking off the discussion, committee chair Walt Lukken, president and CEO of Futures Industry Association, suggested that we stop differentiating between traditional and new markets, and instead recognize that although market evolution and advancements in technology are happening much faster than they have in the past, entrepreneurs have driven market growth throughout history. He also noted that fairness and responsibility are part of the CFTC’s mandate.

Next, Lukken asked the committee for practical advice from the trenches to guide policymaking. He began by asking how the atmosphere of legal uncertainty has impacted committee members’ operations.

The state of states. The variability of state regulation puts customers at a disadvantage, said Vlad Tenev, CEO and chair of Robinhood, referring to the fact that Robinhood’s crypto staking service remains unavailable in California and certain other states due to the patchwork nature of state regulation. This affects the availability of certain stablecoins as well. “A federal framework,” Tenev said, would prevent customers from having to “worry about rules changing every 4 or 8 years, or whether [their asset will] have to be delisted, … preventing their access to it, which I think just puts a cloud of uncertainty over everything.” Tyler Winklevoss, CEO of Gemini, commiserated, given his frustration with the state-by-state regime of licensing for money transmitters.

Business thwarted. Brian Armstrong, CEO of Coinbase, said Coinbase was one of the companies affected by the “prior environment,” referring to CFTC chair Michael Selig’s observation in his opening remarks that “during the prior administration, the American crypto industry weathered a perfect storm of anti-crypto armies, debanking, regulation by enforcement, and offshore exchange failures.” Armstrong said that it was difficult to determine what was permitted under the law, and when they received orders to cease certain activity, they could not get feedback on the reasons or the theory behind the enforcement. “Roughly 80 percent of crypto trading went offshore,” he said.

Most startups will fold under the pressure of government investigations and enforcement, said Hayden Adams, founder of Uniswap Labs, which is aimed at lowering barriers to market participation. His firm survived, but this interference “really held us back,” he said. If the CLARITY Act does not pass, Adams advocates for proactive guidance to keep legal costs down.

Further illustrating the impediments industry leaders are facing, Adena Friedman, CEO and chair of Nasdaq, told the committee that “[w]e’ve been able … to have ETF listings of crypto assets, and then have the ETF options listed on our options market,” since only SEC jurisdiction is in play. “But as we continue to take another step forward in listing an index, a Bitcoin index options product, that's where we've been in regulatory limbo now for a year and a half,” she lamented. She would welcome agreement over how to treat such a “cross-agency” product, and to advance this “spirit of collaboration” into “tangible progress.”

Frank LaSalla would also encourage dialogue among market participants and regulators. The CEO and president of DTCC said that the ability to bring people together to determine the best way forward is something he “would not underestimate.”

Commissions connect. The recent collaboration between the CFTC and the SEC has been a positive step forward, Armstrong said. He observed that in other countries, they do not quibble over categorizing an asset as a security or a commodity. “The question never comes up,” because there is only one regulator. Harmonization and reciprocity, to avoid the burden of duplicate, overlapping licensing applications, would be welcome, said Raghu Yarlagadda, CEO of FalconX, noting that this requires “two, three years, millions of dollars, and an army of lawyers to, again, apply for new licensing.”

“The collaborative approach between the two agencies is going to be extremely important,” agreed Peter Smith. The CEO of Blockchain.com, a global crypto infrastructure platform, also stressed the need for collaboration with innovators, because “there are cracks in our ecosystem between protocols, and those cracks present dangers … where security issues can emerge,” he said.

Coming down the pike. Harmonization and a holistic approach will be crucial as innovations emerge, Joseph Lubin added. The CEO of ConsenSys mentioned programmable finance, which is the use of software-defined rules, often through smart contracts, to automate financial transactions, settlements, collateral movements, and other financial functions. He called this developing technology a “new kind of construct” requiring a collaborative approach to rulemaking, involving regulators and innovators in the process.

Lubin also excitedly discussed vaults, a type of smart contract that serves as a container for financial instruments. “They'll have securities characteristics, they'll have commodities and derivatives characteristics,” he said. They will be “very transparent,” and can be set up so that “the custody remains with the investor, even while the capital is deployed in a strategy.”

Perpetual futures, continual trading, DeFi. Don Wilson, CEO of DRW touted perpetual futures as “a very useful risk management tool,” but they should be considered futures contracts rather than swaps. “If we categorize them as swaps, they’re just going to remain offshore,” he said. We need to “bring them onshore into a safe and regulated environment,” he advised.

Not only have our businesses moved offshore, Arjun Sethi, CEO of Kraken, said, but the U.S. is now the only G20 member without a market structure framework. All other countries have moved forward, he said, and repeated the plea for immediate rulemaking.

Wilson noted that clarity is also required to move into 24/7 trading. “The CFTC has an opportunity to encourage harmonized margin cycles … during weekends,” he said, adding that FCMs also need clarity on whether they can self-custody customer assets and segregated funds if they are represented in tokenized form, and what constraints apply. These concerns require clarification now, “not six months from now … because we’re already racing down this path.”

Vladimir Novakovski, CEO of Lighter, believes that decentralized finance is “not a regulator’s enemy.” He argued that DeFi can support regulatory oversight by providing a verifiable ledger of transactions that can aid regulators’ efforts related to consumer protection, fairness, and market transparency. He added that features such as auto-deleveraging, which automatically reduce positions during periods of market stress, can be consistent with core regulatory principles when implemented fairly and transparently.

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