The U.S. crypto market is caught in a tug-of-war between two federal agencies that can’t agree on who’s in charge. The SEC says most crypto tokens are securities. The CFTC says they’re commodities. And right now, no one knows which rules to follow.

How It Started: Two Agencies, Two Laws

It all goes back to 2015. The CFTC stepped in first, ruling that Bitcoin was a commodity under the Commodity Exchange Act. That meant they could step in if someone manipulated Bitcoin prices or traded futures without proper oversight. They didn’t see Bitcoin as an investment contract - just a digital good, like gold or oil.

The SEC didn’t agree. They saw something else: people buying tokens not to use them, but because they expected the price to go up - thanks to the team behind the project. That’s the heart of the Howey Test, a 1946 Supreme Court rule used to decide if something is a security. If you invest money in a project expecting profits from someone else’s work, the SEC says it’s a security. And that means it needs to be registered, disclosed, and regulated like a stock.

So right away, there was a split. Bitcoin? Commodity. A new token sold in an ICO? Security. But what about Ethereum? Or Solana? Or a token that started as a utility but became a speculative asset? The lines blurred fast.

The Gray Zone: Where Most Tokens Live

Here’s the problem: most crypto projects don’t fit neatly into one box. Take Ethereum. The CFTC called it a commodity in 2019. The SEC never officially said it was a security - but they’ve never said it isn’t either. That’s the gray zone. And it’s where nearly every major crypto project sits.

That uncertainty is why exchanges like Coinbase got sued in 2023. The SEC claimed Coinbase was operating as an unregistered securities exchange because it listed tokens they believed were securities. Coinbase argued the SEC hadn’t given clear rules - and the court agreed, at least partially. In February 2025, the SEC dropped the case entirely. That wasn’t a win for Coinbase. It was a sign the SEC was backing off its all-or-nothing enforcement strategy.

Meanwhile, the CFTC kept moving forward. They approved Bitcoin futures in 2017. Ether futures in 2023. And in April 2025, they approved spot Ethereum ETFs - a move the SEC has delayed for months. The CFTC isn’t waiting for Congress. They’re acting on what they already have authority over: commodities.

Who Has More Power? Enforcement Numbers Don’t Lie

From 2017 to 2022, the SEC launched 32 enforcement actions against crypto firms. The CFTC launched 15. In 2023 alone, the SEC filed 23 cases - most of them against exchanges and platforms for listing unregistered securities. The CFTC’s top violation? Failure to register as a futures broker.

That tells you something. The SEC is going after platforms that let people trade tokens. The CFTC is going after platforms that let people trade futures on tokens. The SEC wants to stop speculation. The CFTC wants to regulate it - and tax it.

The difference isn’t just legal. It’s cultural. The CFTC was built to handle futures markets - oil, wheat, gold. They’re used to volatility. They don’t panic when prices swing. The SEC was built to protect investors from fraud. They see crypto as a wild frontier full of scams. That’s why they move faster to shut things down.

What’s Changing in 2025? The Laws Might Finally Catch Up

For years, Congress sat on the sidelines. But in April 2024, the House passed the CLARITY Act. It’s simple: if a digital asset is decentralized, runs on a mature blockchain, and doesn’t give you ownership rights in a company - it’s a commodity. That puts Bitcoin, Ether, and others under the CFTC’s control.

If a token is sold like a share of a company - promising profits from a team’s efforts - it’s a security. That stays with the SEC.

This isn’t just theory. It’s a real framework. And it’s gaining support. The Senate hasn’t passed anything yet, but behind closed doors, lawmakers are talking. The CFTC’s recent approval of spot Ethereum ETFs? That’s a power play. They’re saying: we’re ready to regulate this. Are you?

The SEC’s delay on Bitcoin ETFs isn’t about risk. It’s about control. They don’t want to lose jurisdiction. But the market is moving. And the CFTC is moving faster.

What This Means for You

If you’re a trader: the SEC’s crackdowns make it harder to buy new tokens on U.S. exchanges. But if you’re trading Bitcoin or Ether, the CFTC’s approval of ETFs means you’ll soon be able to buy them through your brokerage account - just like Apple stock.

If you’re a developer: launching a new token? Don’t assume it’s safe just because it’s called a “utility token.” The SEC doesn’t care what you call it. They care what it does. If people are buying it hoping to profit from your team’s work, you’re in their crosshairs.

If you’re a business: compliance costs are insane. Companies spend an average of $2.7 million a year just trying to follow both agencies’ rules. Many are moving operations overseas - to Europe, where MiCA created one clear set of rules in June 2024. The U.S. is losing ground. In 2020, American firms controlled 32% of the global crypto market. By 2024, that dropped to 14%.

What Comes Next?

The most likely outcome? A compromise by the end of 2025. The CFTC gets Bitcoin and Ether. The SEC keeps control over new tokens sold to investors. Exchanges will have to label tokens clearly: “This is a security,” or “This is a commodity.”

But here’s the real question: will Congress act before the market leaves for good? Right now, the U.S. has the most advanced blockchain developers, the most venture capital, and the most users. But without clear rules, all of that is at risk.

The battle isn’t just about law. It’s about who gets to shape the future of money. And right now, the CFTC is winning the race to regulate. The SEC is still trying to catch up.