Regulators Clear Path for U.S. Traders to Tap Global Crypto Markets

The Commodity Futures Trading Commission (CFTC) has taken a significant step toward regulatory clarity by enabling U.S. traders to access non-U.S. crypto exchanges under a revised framework for foreign board of trade (FBOT) registration. The move, outlined in an advisory released on August 28, 2025, clarifies that offshore derivatives exchanges, including those offering crypto products, can legally serve U.S. participants if they register as an FBOT under Part 48 of the CFTC’s regulations. This development marks a departure from the enforcement-heavy approach of recent years, which had driven many trading activities offshore due to regulatory uncertainty [1].

The advisory reaffirms the CFTC’s longstanding practice of allowing U.S. traders to engage with foreign markets, a policy in place since the 1990s. It also addresses recent confusion regarding whether non-U.S. exchanges should register as designated contract markets (DCMs) or FBOTs, particularly following novel interpretations by enforcement staff inconsistent with decades of precedent. By streamlining the regulatory framework, the CFTC aims to foster greater transparency and compliance while reducing reliance on ex-post enforcement [1].

Acting Chairman Caroline D. Pham emphasized that the advisory provides a clear on-ramp for American companies that previously relocated to foreign jurisdictions to facilitate crypto trading. This shift aligns with the broader “crypto sprint” initiative, launched in August 2025 to implement recommendations from a recent White House report on digital assets [1]. The advisory also builds upon a July 2024 rule change that expanded the role of introducing brokers in routing U.S. orders to global venues, enhancing the flexibility of market access [2].

For Web3 and decentralized trading platforms, this regulatory clarity represents a turning point. The advisory removes structural barriers that had previously limited U.S. traders’ access to offshore platforms, particularly those in the crypto space. By enabling non-U.S. exchanges to register as FBOTs without being forced into full domestic exchange status, the CFTC is promoting a more inclusive and transparent trading environment. This approach aligns with the agency’s broader mission of ensuring market integrity while supporting innovation in financial services [2].

The move also complements the CFTC’s ongoing efforts to modernize its surveillance capabilities. In a separate initiative, the agency has deployed Nasdaq’s Market Surveillance platform to enhance its ability to detect fraud and manipulation across traditional and digital asset markets. This technology, according to the CFTC, allows for cross-market analytics, real-time monitoring, and automated alerts—critical tools for managing the complexities of 24/7 trading and decentralized market structures [3].

As the U.S. crypto market continues to evolve, the CFTC’s actions reflect a shift toward regulatory clarity and proactive oversight. With the House of Representatives having passed the CLARITY Act, which would classify most cryptocurrencies as commodities and place them under the CFTC’s jurisdiction, the agency is well-positioned to play a central role in shaping the regulatory landscape [4]. The CLARITY Act also underscores the need for robust surveillance and reporting mechanisms, both of which the CFTC is now enhancing through technological upgrades and updated regulatory frameworks [4].

Despite these developments, the CFTC faces staffing challenges. With only acting Chair Pham currently confirmed and several key commissioners set to leave, the agency’s capacity to advance its regulatory agenda could be constrained. Nonetheless, Pham’s leadership continues to emphasize innovation and transparency, as seen in the agency’s expanded use of AI and blockchain-based tools for market monitoring [5].

Source:

[1] Acting Chairman Pham Announces FBOT Advisory to Provide Regulatory Clarity for Non-U.S. Exchanges (https://www.cftc.gov/PressRoom/PressReleases/9111-25)

[2] CFTC opens door for Web3 exchanges via FBOT registration (https://blockworks.co/news/cftc-fbot-registration)

[3] CFTC Enhances Market Oversight with Advanced Surveillance Technology Platform (https://www.cftc.gov/PressRoom/PressReleases/9110-25)

[4] CFTC to Surveil Crypto, Prediction Markets Using Nasdaq ... (https://finance.yahoo.com/news/cftc-surveil-crypto-prediction-markets-153347633.html)

[5] CFTC's Johnson confirms she will depart regulator next week (https://cointelegraph.com/news/cftc-commissioner-kristin-johnson-departure-crypto-regulation)