The U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have launched a joint initiative to enhance regulatory clarity for the cryptocurrency industry. Announced in September 2025, the collaboration aims to transition from enforcement-based regulation to a framework that supports innovation and provides legal certainty for market participants. Paul S. Atkins and Caroline D. Pham are spearheading the effort, with significant involvement from the SEC’s Division of Trading and Markets and the CFTC’s Division of Market Oversight. The initiative includes exploring 'innovation exemptions' to facilitate peer-to-peer trading of spot and derivative crypto assets over decentralized finance (DeFi) protocols. This regulatory shift is anticipated to attract more institutional participation, boost exchange activity, and increase the total value locked (TVL) in DeFi platforms.