- The CFTC launched an initiative to enable spot crypto trading on regulated exchanges, and public comments are due August 18.
- These new contracts would work like futures but mirror actual crypto prices on official CFTC markets.
- The agency currently operates with only two commissioners, but is coordinating with the SEC to create federal crypto trading rules.
The U.S. Commodity Futures Trading Commission has initiated a groundbreaking effort to enable spot cryptocurrency asset contracts on CFTC-registered futures exchanges. This development represents a significant step toward a federal-level digital asset trading infrastructure.
Acting Chair Caroline Pham announced the initiative Monday as part of the CFTC’s “crypto sprint” program. The commission aims to implement recommendations from President Trump’s Working Group on Digital Asset Markets, which delivered 18 specific proposals for cryptocurrency regulation.
“The CFTC is fully ahead on enabling immediate trading of digital assets at the federal level in coordination with the SEC’s Project Crypto,” Pham stated. The commission believes a clear regulatory solution can be implemented immediately.
How Spot Crypto Contracts Would Work
The proposed spot crypto asset contracts would function as futures-style, listed instruments that mirror spot cryptocurrency prices. These contracts would trade exclusively on CFTC-registered designated contract markets (DCMs).
This structure addresses current regulatory limitations, as the CFTC typically regulates derivative products rather than direct commodity trading. The exception applies to cases involving fraud and market manipulation.
Section 2(c)(2)(D) of the Commodity Exchange Act provides the legal framework for this initiative. The provision requires retail commodity transactions involving leverage, margin, or financing to occur on CFTC-registered DCMs, creating a pathway for regulated leveraged spot crypto contracts.
The CFTC seeks public feedback on applying Section 2(c)(2)(D) and Part 40 of CFTC regulations to cryptocurrency trading. Part 40 governs DCM rules, including registration requirements, compliance standards, and enforcement mechanisms.
The commission also requests input on securities law implications, particularly how SEC frameworks might apply to trading non-security assets that could constitute investment contracts. This coordination between agencies aims to prevent regulatory gaps and conflicts.
Public comments must be submitted by August 18, providing stakeholders a tight window to influence the regulatory approach.
Commission Faces Staffing Challenges
The CFTC operates with reduced capacity, maintaining only two of five commissioner positions. Acting Chair Pham and Commissioner Kristin Johnson currently lead the agency, though Johnson plans to depart later this year.
Recent departures include former Chair Rostin Behnam, who resigned on January 20 when the Trump administration assumed office. Commissioners Summer Mersinger and Christy Goldsmith Romero both stepped down in May.
Trump’s nominee for permanent chair, Brian Quintenz, awaits Senate confirmation after the White House postponed the nomination vote last week.
The Working Group’s comprehensive report recommended that the CFTC clarify cryptocurrency commodity classifications and registration requirements for decentralized finance participants. Additional recommendations addressed blockchain-based derivatives and guidance for CFTC-regulated entities handling digital assets.
The initiative represents federal coordination between the CFTC and SEC to establish comprehensive cryptocurrency trading frameworks. This regulatory clarity could accelerate institutional adoption and provide traders with standardized, regulated markets for cryptocurrency exposure.
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