---
type: claim
domain: internet-finance
description: "The March 2026 MOU formally divides crypto jurisdiction: SEC controls primary market fundraising (ICOs, presales) while CFTC controls secondary spot trading of digital commodities, with a 180-day registration window and dual-registration pathway for exchanges"
confidence: proven
source: "SEC-CFTC MOU (March 11, 2026); CFTC Release 9198-26; SEC Interpretive Release S7-2026-09"
created: 2026-03-18
supports:
- SEC Token Taxonomy Framework (2026)
related:
- the SECs Transition Point mechanism creates a competitive incentive for token projects to decentralize because decentralization is now a formal pathway to reduced regulatory burden
- the SECs distinction between the crypto asset and the investment contract means tokens are not inherently securities and only the surrounding transaction structure can create securities obligations
reweave_edges:
- SEC Token Taxonomy Framework (2026)|supports|2026-04-19
- the SECs Transition Point mechanism creates a competitive incentive for token projects to decentralize because decentralization is now a formal pathway to reduced regulatory burden|related|2026-04-19
- the SECs distinction between the crypto asset and the investment contract means tokens are not inherently securities and only the surrounding transaction structure can create securities obligations|related|2026-04-19
sourced_from:
- inbox/archive/internet-finance/2026-03-17-sec-cftc-token-taxonomy-interpretation.md
---

# The SEC-CFTC jurisdictional split assigns SEC primary market authority over fundraising and CFTC secondary market authority over spot trading creating a dual-registration boundary that token projects must navigate

The SEC-CFTC MOU signed March 11, 2026 formally resolves the "crypto turf war" by splitting jurisdiction:

**SEC authority (primary market):**
- Initial token sales, ICOs, presales
- Investment contract formation and termination analysis
- Securities registration and disclosure requirements
- Anti-fraud enforcement across all categories

**CFTC authority (secondary market):**
- Spot trading of digital commodities on secondary markets
- Commodity exchange registration and oversight
- Market manipulation enforcement for commodity trading

**Shared mechanisms:**
- Joint Harmonization Initiative office (Robert Teply/SEC, Meghan Tente/CFTC)
- Real-time data sharing between agencies
- "Dual-registration" pathway for exchanges to operate as both securities and commodity platforms
- 180-day registration window for companies operating under regulatory ambiguity

For futarchy-governed projects, this creates a two-stage regulatory interaction:
1. **At launch (SEC):** Token sale must comply with securities laws or qualify for safe harbor exemption. Representations made at this stage determine investment contract status.
2. **Post-Transition Point (CFTC):** Once the token achieves commodity status, secondary trading falls under CFTC oversight with different compliance requirements.

The jurisdictional split also affects prediction markets. The CFTC is separately pursuing event contract regulation through its ANPRM process, while the SEC framework doesn't address conditional tokens. This means futarchy mechanisms may fall in a jurisdictional gap — the governance function (SEC territory) is implemented through prediction market mechanics (CFTC territory).

---

Relevant Notes:
- [[the SECs investment contract termination doctrine creates a formal regulatory off-ramp where crypto assets can transition from securities to commodities by demonstrating fulfilled promises or sufficient decentralization]] — the jurisdictional split defines what "transitioning" means in practice
- [[the SEC frameworks silence on prediction markets and conditional tokens leaves futarchy governance mechanisms in a regulatory gap neither explicitly covered nor excluded from the token taxonomy]] — the SEC/CFTC boundary is where this gap sits

Topics:
- [[maps/internet finance and decision markets]]