In a significant move aimed at enhancing regulatory clarity and fostering global market access, particularly for offshore cryptocurrency firms, the U.S. Commodity Futures Trading Commission (CFTC) issued a new advisory on the Foreign Board of Trade (FBOT) registration framework. This development, announced on August 28, 2025, by Acting Chairman Caroline D. Pham, marks a pivotal step in aligning U.S. trading regulations with the evolving landscape of global derivatives markets.
Understanding the FBOT Advisory
The advisory issued by the CFTC’s Division of Market Oversight (DMO) addresses the registration framework for non-U.S. entities, legally organized and operating outside the U.S., that wish to provide direct market access to U.S.-based traders. Of particular note, this framework is applicable across all asset classes, encompassing both traditional and digital asset markets.
Acting Chairman Pham emphasized the advisory’s role in providing the regulatory clarity necessary to bring trading activities back to the U.S. that had previously been driven offshore due to stringent enforcement-based regulations. In the press release announcing the advisory, Chairman Pham stated, “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 U.S. markets.”
Key Highlights of the Advisory
- Reaffirmation of Existing Framework: The advisory reiterates the CFTC’s established FBOT registration framework, which has been in place since the 1990s. This framework allows U.S. traders to access non-U.S. exchanges registered with the CFTC, providing a legal and efficient trading environment.
- Regulatory Clarity and Market Access: By clarifying the requirements for FBOT registration, the advisory aims to eliminate confusion and disruptions caused by recent enforcement actions. It distinguishes between the need for FBOT registration and the requirements for becoming a Designated Contract Market (DCM).
- “For the avoidance of doubt, a FBOT that is registered with the CFTC in accordance with the Part 48 rules does not need to become a DCM in order to provide U.S.-located members or other participants with direct access to the electronic trading and order matching system of the FBOT. Conversely, the Division is providing a reminder that a domestic board of trade that is located in the United States is subject to the DCM regulatory framework established under CEA section 5 and does not fall within the scope of the Part 48 rules.”
- Global Market Integration: The advisory underscores the CFTC’s commitment to integrating U.S. markets with global trading platforms, thereby offering U.S. traders access to diverse and liquid markets worldwide.
- Simplified Registration Process: The CFTC’s existing registration categories are highlighted as the simplest and fastest solutions for non-U.S. exchanges seeking to provide direct access to U.S. traders.
The CFTC’s advisory is part of a “crypto sprint” to implement policy recommendations from President Trump intended to enable digital asset trading and innovation.
