CFTC Opens Door To Foreign Crypto Exchanges

The US Commodity Futures Trading Commission (CFTC) has opened up a way for overseas derivatives exchanges to serve American clients by issuing a clarification to its guidance around registering as foreign boards of trade, regardless of asset classes and including crypto trading venues.

The Market Oversight Division of the CFTC issued an advisory about the Foreign Board of Trade registration framework for non-US entities, in a bid to enable exchanges registered outside its jurisdiction to serve American customers.

The clarification comes after the regulator said it had noticed a degree of “confusion and disruption” about whether non-US exchange should register under FBOT or as a designated contract market (DCM), due to recent enforcement actions from the CFTC based on “novel interpretations…inconsistent with decades of CFTC precedent and practice.”

“By reaffirming the CFTC’s longstanding registration framework for FBOTs, this advisory is intended to promote regulatory clarity and access to markets,” the regulator says.

The move opens the door for exchanges such as Binance to re-kindle its presence in the US derivatives market. Acting CFTC chair Caroline Pham. says that the step is designed to attract back American companies that had been forced to relocate under the previous administration’s anti-crypto push. “Today’s FBOT advisory provides the regulatory clarity needed to legally onshore trading activity that was driven out of the United States due to the unprecedented regulation by enforcement approach of the past several years,” she states.

“By reaffirming the CFTC’s longstanding approach to provide U.S. traders with choice and access to the deepest and most liquid global markets, with a wide range of products and asset classes, American companies that were forced to set up shop in foreign jurisdictions to facilitate crypto asset trading now have a path back to US markets,” Pham adds.

The regulator says that it has received an increased number of enquiries about the particulars of FBOT registrations, including requests for clarification around requirements. Pham says that Americans have been able to trade on non-US exchanges registered with the CFTC as FBOTs since the 1990s and going forward this will apply to digital asset trading platforms as well.

“Starting now, the CFTC welcomes back Americans that want to trade efficiently and safely under CFTC regulations, and opens up US markets to the rest of the world. It’s just another example of how the CFTC will continue to deliver wins for President Trump as part of our crypto sprint,” Pham says.