Published: August 6th, 2025
America's Commodity Futures Trading Commission (CFTC) is considering a proposal that would see federally regulated futures exchanges host spot crypto trades.
The commission's acting Chair Caroline Pham said in a statement this week that the regulator was starting a public consultation on the idea, which is part of a broader effort to turn federal guidance on digital assets into actionable rules.
If enacted, the plan would let what financial law calls designated contract markets, or DCMs, to list physically settled crypto contracts on their exchange operations. Pham noted that rules detailed in the current Commodity Exchange Act gave the agency the authority to proceed.
Saying she opposed having the US adopt complex EU-style MiCA regulation, Pham said the act's language gave the CFTC a ‘clear and simple way forward for immediate implementation.’
Instead of creating a new rulebook for such trades, Pham proposes the use of existing CFTC frameworks for oversight of retail forex and futures exchanges to regulate spot crypto markets. By maintaining regulatory simplicity, she said US future exchanges could be hosting spot crypto trades in a year to 18 months.
“Together, we can make the USA the world's crypto capital.”
The current Commodity Exchange Act says that any retail trades involving commodities with leverage, margin, or financing have to be conducted on a DCM Pham explained.
The CFTC is an independent agency of the U.S. government that regulates the derivatives markets, including futures, options, and swaps. Its mission is to protect market users and the public from fraud, manipulation, and abusive practices related to these markets, while also fostering open, competitive, and financially sound markets.
The CFTC's pro-crypto stance is markedly different from one it adopted under the previous Biden administration. In 2021 the agency began a series of enforcement actions against crypto firms, not least an investigation of Binance to establish if the exchange had allowed US residents to trade in cryptocurrency-backed derivatives.
The agency had concerns that Binance was letting Americans place wagers on derivatives, violating the country's rules. The CFTC said it wanted to establish if the exchange, which was not registered with the agency, was letting Americans secretly trade in derivatives that the agency monitors.
While the had not been accused of any misconduct, the probe indicated a direction of travel for the watchdog, cooling the crypto industry's hopes of becoming an alternative to mainstream investment options for US investors.
According to CFTC statements at the time, virtual currencies such as Bitcoin and Ether were commodities, and their futures and other derivatives fell under the agency's jurisdiction.
The rule implies that crypto platforms must abide by strict customer protection and oversight demands if residents of the U.S. trade them. This regulation applies regardless of the location of the crypto exchange.
Binance CEO Changpeng Zhao, said in a statement that the company closely follows and respects US rules. He added that the exchange has robust control systems that prevent customers from laundering money. However, he refused to confirm if the CFTC was probing his firm.
Zhao, who posted a statement on Twitter, said Binance would continue to improve its compliance. He added that the exchange would work closely with regulators worldwide to improve the industry's compliance standards.
In an earlier statement, the exchange reiterated that it limits US residents from using its trading platform and applies advanced technology to scrutinize deposits and withdrawals for any signs of untoward transactions. Binance respects its compliance obligations, the statement added.
Bitcoin's price dropped after media reports about the Binance investigation.
The CFTC investigation added to a growing government crackdown on virtual currencies. The agency had already sued BitMEX for flouting the broker registration process. As a result, the exchange saw its market share decline since the agency's keen eye fell on it.
Coinbase also announced a few weeks earlier that it had responded to a sweeping CFTC investigation, while the US Treasure Department considered introducing new regulations that would require banks to record the identities of individuals who invest in cryptocurrencies.
Advocates of the move argued that it would curtail money laundering and other related illegal activities. However, crypto enthusiasts and holders said it could undermine virtual currencies' key characteristics: the ability to send or receive value without an intermediary.
At the time, Binance had become synonymous with the rise of cryptocurrencies. A legal or enforcement action against the exchange was seen as the most significant CFTC case targeting cryptocurrencies.
The Binance CEO regularly touted virtual currencies as an asset class on social media and television, adding that they were the reason had become a billionaire.
In 2019, the crypto exchange set up Binance USA, a San Francisco-based entity. The CEO said that Binance U.S. is an autonomous establishment targeting U.S. residents only. He added that the California-based exchange was registered with the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury Department and has several state licenses.
Despite having a subsidiary targeting American residents, Zhao said he could not shake off the feeling that improper trades often slip through the cracks. He said that Binance blocks U.S. residents from accessing the site. However, he admitted that users often find intelligent means of beating such restrictions.
The CEO said it is time the exchange got smarter about its geographic limitation strategies.
In October 2020, the CFTC charged BitMEX, a Seychelles-based crypto exchange, alleging that it allowed American residents to trade crypto derivatives when it did not have the requisite brokerage licensing. The Justice Department charged the exchange's founders with separate crimes that included violating laws that prevent money laundering.
Applying BitMEX-like charges to Binance was more difficult because the exchange had (and maintains to this day) an unusual corporate structure. The CEO said that unlike most companies, his organization consists of several entities located around the world.
The structure has upset competitors. In documents presented before the panel examining the process of going public, Coinbase said it was competing with companies with varying degrees of regulatory adherence.
