CFTC Says Registration Framework for Non-US Exchanges Includes Digital Asset Markets

The Commodity Futures Trading Commission (CFTC) said Thursday (Aug. 28) that American companies that left the country to enable crypto asset trading now have a way to participate in American markets.

That’s according to CFTC Acting Chairman Caroline Pham, who announced a new foreign board of trade (FBOT) advisory from the agency that is meant to provide regulatory clarity for non-U.S. exchanges.

The advisory concerns the FBOT registration framework for such entities that want to provide people in the U.S. with access to their trading platforms, and it applies to both traditional and digital asset markets, the CFTC said in a Thursday press release.

“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,” Pham said in the release. “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, America companies that were forced to set up shop in foreign jurisdictions to facilitate crypto asset trading now have a path back to U.S. markets.”

Pham said in the release that this solution will use the CFTC’s existing registration categories that have enabled Americans to trade on non-U.S. exchanges that are registered with the agency as FBOTs since the 1990s.

The CFTC said in the release that it has received a growing number of inquiries about when FBOT registration is required, what requirements and procedures are involved in obtaining FBOT registration, and whether non-U.S. exchanges should register as an FBOT or a designated contract market (DCM).

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

Bloomberg reported Thursday that the CFTC’s advisory mostly reiterates existing policy, but signals that the agency could be more open to offshore exchanges that operate in jurisdictions that have regulatory frameworks seen as credible by the U.S.

The CFTC said in March that digital asset derivatives will get the same regulatory treatment as other products.