Kraken in SEC-CFTC Roundtable: Build a rulebook for tokenized markets

On Monday, Kraken co-CEO Arjun Sethi joined the leaders of ICE, CME, NASDAQ, CBOE, KALSHI, DRW and Polymarket at the SEC-CFTC roundtable of platform and market structure.

The panel, hosted by former CFTC commissioner Jill Somers and trade and market director Jamie Selway’s SEC division, has put together some of the most influential voices in the global market. This was the first joint roundtable held by the SEC and CFTC in 14 years.

The conversation focused on important questions. How can futures, stocks, options and digital asset venues converge to consistent standards of implementation, clearance, disclosure and investor access without slowing down the pace of innovation?

Our message was clear. Tokenization is the modernization of infrastructure, and harmonious rules are the bridge from today’s fragmented systems to tomorrow’s open and efficient markets.

Why is this round table important?

Chairman Atkins was held with a call for unified oversight, “a complex, fragmented system has now ended.” CFTC Committee member Caroline Fam reiterated his emotions. This was the first joint SEC-CFTC roundtable since Dodd Frank, marking a “new day” for cooperation.

The background is important. For decades, the securities and derivatives markets have evolved under separate laws and mandates. As tokenization and digital assets move towards mainstream workflows, platforms and regulators face challenges familiar to new contexts, including product classification, co-approval, 24/7 operations, and risk management.

Kraken’s perspective: The principle of scale

Clarity enables innovation

The biggest unknown in a tokenized market is not technology itself, but road rules. Without clear guidance, the product stalls or moves on land or offshore.

To be clear, innovation accelerates. As Arjun emphasized in his discussion, “If there is clarity, you can actually innovate. Without clarity, it’s difficult to innovate.

Tokenization increases access and efficiency

Tokenized assets can unlock private credit and real estate liquidity, reduce settlement friction, enable ownership and expand participation. The purpose is to have access to the same financial products and services that are booked too frequently for a small number of people.

Safeguards need to be scaled

Kraken’s perspective is that trust is built by meeting risks with safeguards. This means a transparent valuation of the underlying assets, the remoteness of detained custody and bankruptcy, and secondary market rules that support actual liquidity.

These are the same principles behind Kraken’s Reform-of-Reserves leadership and institutional grade custody through Kraken Financial.

An innovation exemption is essential

Some panelists pushed back the safe port. Arjun disagreed. “It’s really easy to say we don’t give an innovation exemption, but the regulatory barriers were monopolistic and it was difficult to innovate.”

Controlled exemptions from guardrails allow experiments while protecting retail investors, allowing responsible actors to test and scale innovation. Without such exemptions, innovation will continue to thrive overseas, not in the US.

The US risks delay

When one panelist argued that the US remains the most innovative financial market, Arjun pointed out defi. “We’ve never really lost,” he replied frankly: “We’re losing now.”

Without clear rules, innovation will continue to thrive overseas rather than at home.

Important topics from the discussion

Joint jurisdiction and product approval

Current legislation in Congress represents a generation of opportunities to bring clarity to digital assets, just as Dodd Frank established a derivatives framework. Our recommendations are simple. The SEC must oversee token funding, while the CFTC must regulate intensive intermediaries and token lists. Clear lines build confidence and avoid unnecessary complexity.

Product approval and innovation exemption

You cannot implement a product-by-product approach. A broad range of predictable standards with scoped innovation exemptions are the way forward. This allows responsible businesses to safely experiment while providing evidence that they need to act with regulators.

24/7 trading

Kraken already operates a market 24/7 worldwide. Pre-funded accounts, isolated custody, real-time margins and ongoing trade surveillance proved that this could be done. Financial markets need to modernize to reflect today’s ever-present economy, increasing access and efficiency without sacrificing stability.

Permanent and Derivatives

“A lasting future is already established globally. Kraken offers a robust safeguards under FCA regulations, demonstrating that innovation can coexist with strong surveillance. Kraken looks forward to working with the CFTC to replicate this model in the US.

Portfolio Margins and Interoperability

Agents need to recognize offsets across product classes and concentrate interoperability on protection and reporting portability rather than enforcing the same market design.

Close Reflection

Arjun closed, noting how much it had changed. He noted increased consistency as the most promising development, where management of Congress, regulatory authorities and market structures is.

“Our belief is that the market structure helps us improve our customers’ services,” he said. “We can do more with less. We can provide more services and more capital to our customers.”

For us, the goal is simple. Supports a rulebook that expands client access, raises intermediary standards and strengthens innovation across the US