- Contracts for immediate cryptocurrency purchasing are being considered for listing on exchanges overseen by the CFTC, resembling traditional futures contracts.
- The CFTC’s invitation is part of a “crypto sprint” initiative responding to earlier recommendations.
The U.S. Commodity Futures Trading Commission (CFTC) is exploring the possibility of allowing “spot crypto asset contracts” to be traded on futures exchanges registered with the agency.
This move comes as part of the CFTC’s “crypto sprint,” aimed at implementing the suggestions put forth by a prior working group regarding digital asset markets. Acting Chair of the CFTC, Caroline Pham, mentioned collaborative efforts with the SEC’s Project Crypto, with the goal of streamlining the federal regulation of immediate digital asset trading.
Request for Community Input
Spot crypto asset contracts, which reflect current market prices for cryptocurrencies, are being evaluated for listing on CFTC-registered designated contract markets (DCMs). These contracts share similarities with traditional futures contracts. The CFTC is particularly interested in public feedback on the application of the Commodity Exchange Act, specifically regarding subsection (c)(2)(D) of Part 40 of its rules.
Section 2(c)(2)(D) provides the regulatory foundation for overseeing spot crypto contracts that involve leverage, margin, or financing. It mandates that any retail commodities transaction of this nature must occur on a DCM registered with the CFTC.
Part 40 of the CFTC Regulations outlines rules for DCMs, including guidelines for enforcement, registration, and compliance. The CFTC is also soliciting input on potential implications related to securities laws. Specifically, it seeks insights on how a Securities and Exchange Commission (SEC) framework could be applied to trading non-security assets that might be classified as investment contracts.
The deadline for submitting public comments is August 18th. A recent report from a working group on crypto policy recommendations recommended that the CFTC clarify the commodity status of cryptocurrencies. It also called for clarification on how CFTC registration requirements would interact with decentralized finance (DeFi) participants, and what regulated entities can do with crypto assets.
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