tl;dr
The US Commodity Futures Trading Commission (CFTC) is advancing efforts to allow trading of spot crypto asset contracts on CFTC-registered futures exchanges as part of its "crypto sprint" initiative, following recommendations from President Trump's Working Group on Digital Asset Markets. Acting Chai...
The US Commodity Futures Trading Commission (CFTC) has initiated a move to facilitate the trading of “spot crypto asset contracts” on CFTC-registered futures exchanges. This effort is part of the CFTC’s broader “crypto sprint” initiative, which aims to put recommendations from President Donald Trump’s Working Group on Digital Asset Markets into action. The working group issued 18 recommendations addressing how digital assets should be handled.
Acting Chair Caroline Pham emphasized the urgency and clarity of the approach, stating that the CFTC is rapidly advancing efforts to enable immediate digital asset trading at the federal level, coordinated with the Securities and Exchange Commission’s (SEC) Project Crypto. The proposed spot crypto asset contract would be similar to a futures-style listed contract, tracking spot crypto prices, and traded on a CFTC-registered designated contract market (DCM).
The CFTC is actively seeking public input regarding the application of section 2(c)(2)(D) of the Commodity Exchange Act and Part 40 of CFTC regulations. Section 2(c)(2)(D) mandates that retail commodity transactions involving leverage, margin, or financing occur on a registered DCM, thus establishing the legal framework to regulate leveraged spot crypto contracts. Part 40 covers rules and compliance for designated contract markets, including registration and enforcement. The CFTC also requests feedback on how securities laws, particularly under SEC jurisdiction, might influence trading of non-security assets that could be classified as investment contracts. Public comments are open until August 18.
The Working Group’s report further recommends the CFTC clarify the classification of cryptocurrencies as commodities and address the registration and operational expectations for decentralized finance (DeFi) market participants under CFTC regulation. The report urges updates to rules to better accommodate blockchain-based derivatives. Sixteen additional recommendations relate to the roles of other financial agencies, such as the SEC and Treasury.
Currently, the CFTC faces leadership challenges, operating with only two commissioners: Acting Chair Caroline Pham and Kristin N. Johnson, who is expected to leave later this year. Former Chair Rostin Behnam resigned at the start of the Trump administration, and two other commissioners stepped down in late May. Nomination for a permanent chair, Brian Quintenz, remains stalled after a White House delay of the Senate vote. This backdrop adds complexity to the agency’s ambitious crypto regulatory agenda.