U.S. Commodity Futures Trading Commission Pushes for Allowing Spot Crypto Trading on Registered Exchanges

The U.S. Commodity Futures Trading Commission (CFTC) has initiated regulatory reforms to allow trading of spot cryptocurrency contracts on registered futures exchanges.
On the 4th (local time), the CFTC announced that it would implement 18 policy recommendations made by the Digital Asset Markets Working Group under the Donald Trump administration.
As part of this partial implementation, the CFTC formally solicited market participants' input on allowing spot cryptocurrency contract trading on CFTC-registered futures exchanges.
The CFTC's "Crypto Sprint"
Sprint program, which allows for the exchange of actual cash cryptocurrencies on CFTC-registered futures exchanges (DCMs).
The move is aimed at allowing for immediate trading of physical assets through a type of futures-style exchange-listed contract that reflects the asset price.
In a statement released on the same day, Acting Chairman Pham said, "We are working with the SEC's Project Crypto to enable instant trading of digital assets at the federal level.
"The CFTC's efforts to address this issue are already moving full speed ahead," he said, emphasizing that "there are clear and simple solutions the CFTC can implement immediately."
The CFTC currently only has supervisory authority over derivatives, but may also intervene in commodity trading in cases of fraud or market manipulation.
However, if the proposed law is implemented, the CFTC would be able to more broadly regulate spot cryptocurrency trading, including leverage, margin, and lending.
In this regard, the CFTC has implemented Section 2(c)(2)(D) of the Commodity Exchange Act and Part 40 of the CFTC Regulations.
The SEC is seeking public comment on how to apply the SEC's 40. Article 2 provides for the use of leverage, margins, and financing.
Article 40 provides that retail commodity transactions using cryptocurrencies must be conducted through a CFTC-registered DCM, which may serve as the legal basis for spot cryptocurrency contracts.
The CFTC will also review how such cryptocurrency spot trading methods relate to the SEC's securities regulatory framework, particularly with regard to investment contracts.
The SEC also seeks comment on how its regulations apply to non-securities asset transactions that may be considered contracts. The public comment period closes on August 18.