Second initiative under the CFTC's Crypto Sprint continues the push for digital asset regulatory clarity
Just days after the closing of the comment period for the CFTC's first initiative under its Crypto Sprint, on August 21, 2025, the CFTC announced the beginning of its next Crypto Sprint initiative. The CFTC previously announced the Crypto Sprint and issued its first initiative for trading spot crypto contracts that are listed on a CFTC-registered futures exchange, i.e., a designated contract market ("DCM"), using its existing authority, beginning implementation of the recommendations in the White House digital asset report ("White House Report") that was released at the end of July. With the comment period for the first initiative closed, the CFTC now seeks public comment on the remainder of the recommendations for the CFTC that were made in the White House Report, with comments due by October 20, 2025.
The White House Report called for the CFTC and SEC to take immediate action utilizing their respective rulemaking and exemptive authority to advance digital asset trading in the United States. One of the many recommendations in the White House Report was for the CFTC to provide clarity and guidance on the listing of leveraged, margined, or financed spot retail commodity transactions on a CFTC-registered designated contract market and how digital assets may be considered commodities. In this vein, the CFTC's brief announcement requested feedback and suggestions on listing spot crypto asset contracts including under Section 2(c)(2)(D) of the Commodity Exchange Act ("CEA"), Part 40 of the CFTC's Regulations (provisions common to registered entities), and whether there were any implications under the securities laws with respect to an SEC framework for trading non-security assets that are part of an investment contract.
In response to the first initiative, the CFTC received 19 submissions generally supportive of the CFTC's use of existing authority to bring leveraged, margined, or financed spot retail commodity transactions onto CFTC-registered designated contract markets. Some commenters noted, however, that the CFTC's effort should complement, and not supplant, Congressional action on crypto market structure legislation. Many of the comments stated that guidance and standards should be tailored to the unique technical aspects and risks of digital assets and DeFi, especially with regard to custody, segregation, and on- and off-chain surveillance and monitoring.
With this latest Crypto Sprint initiative, the CFTC seeks comment on a significantly broader range of topics from the White House Report, with written comments due by October 20, 2025, due on these recommendations:
- Providing clarity and guidance on:
- the listing of leveraged, margined, or financed spot retail commodity transactions on digital assets;
- how digital assets may be considered commodities; calculating and administering segregation obligations;
- haircuts on digital assets held by registered intermediaries;
- applicability of registration requirements to DeFi activities, smart contract protocols, or decentralized autonomous organizations;
- acceptance of digital asset collateral and the adoption of tokenized non-cash collateral; and
- the classification of swaps on digital assets;
- Collaborating with FinCEN for guidance regarding customer identification programs;
- Enabling firms to provide bundled trading and custody services; and
- Considering allowing the use of blockchain technology to satisfy recordkeeping obligations.
Taken together with the SEC's Project Crypto, announced the day after the release of the White House Report, it is clear that both the SEC and CFTC are moving quickly to find ways to exercise their interpretative and exemptive authority to provide clarity in the digital asset space. This second initiative by the CFTC takes on special importance in light of SEC Chair Atkins' recent comments at the Wyoming Blockchain Conference that there are very few tokens that are securities with the caveat that it depends on the package around the token that is being sold. Should his view hold, it may be very likely that far more tokens will be viewed as commodities as opposed to securities.
At the same time, the Senate is moving forward with crypto market structure legislation, having released the Senate Banking Committee discussion draft building upon the House's Digital Asset Market Clarity Act of 2025 ("Clarity Act") and the anticipated discussion draft from the Senate Agriculture Committee expected in September. With "regulation by enforcement" long in the rearview mirror, this is an opportune time for interested stakeholders to educate and provide valuable insight to Congress and the agencies in formulating a framework for regulating digital assets in the U.S. Firms interested in submitting comments should reach out to their usual DWT contact.
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