TLDR
- CFTC launches initiative to allow spot crypto trading on registered futures exchanges through existing legal authority
- Acting Chair Caroline Pham seeks public feedback by August 18 as part of “crypto sprint” implementing Trump administration recommendations
- Plan would use designated contract markets (DCMs) to list physically settled crypto contracts without new legislation
- Legal experts warn of jurisdictional conflicts with SEC over security vs commodity classification of crypto assets
- CFTC currently operates with only two commissioners after multiple departures during administration transition
The US Commodity Futures Trading Commission has announced plans to enable spot cryptocurrency trading on federally regulated exchanges. The initiative represents the agency’s first major step toward implementing digital asset guidance from the Trump administration.
Acting Chair Caroline Pham revealed the proposal Monday as part of the CFTC’s “crypto sprint” initiative. The plan would allow designated contract markets to list physically settled crypto contracts using current legal frameworks.
“There is a clear and simple solution the CFTC can implement now,” Pham stated. The agency is seeking public feedback on the proposal through August 18.
Run, don’t walk. The U.S. crypto sprint is on! @CFTC 🇺🇸🫡 https://t.co/jtQJwWNls5
— Caroline D. Pham (@CarolineDPham) August 4, 2025
The initiative stems from 18 recommendations made by President Trump’s Working Group on Digital Asset Markets. Pham described the effort as coordinated with the SEC’s Project Crypto to enable immediate federal-level digital asset trading.
Using Existing Authority for Crypto Regulation
The CFTC proposal relies on section 2(c)(2)(D) of the Commodity Exchange Act. This provision requires retail commodity transactions involving leverage, margin, or financing to occur on CFTC-registered designated contract markets.
Designated contract markets are CFTC-registered exchanges that list futures and options contracts. Examples include CME Group and ICE Futures US, which follow strict federal rules on market integrity and customer protections.
The spot crypto asset contracts would function like futures-style listed contracts that mirror spot crypto prices. They would be traded on these regulated platforms under existing CFTC oversight.
Pham opposes adopting complex European-style MiCA regulation. Instead, she proposes leveraging current CFTC frameworks over retail foreign exchange and futures exchanges to regulate spot crypto markets within 12-18 months.
The CFTC is also seeking input on Part 40 regulations concerning DCM rules. These include registration requirements, compliance standards, and enforcement provisions that would apply to crypto trading.
Legal Concerns Over Jurisdictional Conflicts
Legal experts have raised concerns about potential conflicts between CFTC and SEC authority. The proposal assumes crypto assets can be classified as commodities under CFTC jurisdiction.
Andrew Rossow, a public affairs attorney and CEO of AR Media Consulting, warned of structural risks. He noted the plan’s success depends on meaningful inter-agency coordination and clear asset-by-asset determinations before listing.
“The CFTC’s initiative assumes it can proceed with listing crypto assets as commodities, but that directly conflicts with the SEC’s position that many of these same assets qualify as securities under the Howey test,” Rossow explained.
The security-commodity classification problem creates what Rossow described as a regulatory paradox. Many crypto assets exhibit hybrid characteristics that don’t fit neatly into binary regulatory frameworks.
Rossow warned that tokens initially qualifying as commodities could later develop security-like features. Changes through governance mechanisms, staking, or protocol upgrades could alter their regulatory status.
This dynamic reality creates legal instability, according to Rossow. Market participants could face retrospective SEC enforcement for unregistered securities transactions, even after complying with CFTC rules in good faith.
The CFTC is specifically seeking input on potential securities law implications. This includes how SEC frameworks might apply to trading non-security assets that could constitute investment contracts.
The agency wants feedback on whether additional safeguards are needed for spot crypto contracts on DCMs. It also seeks guidance on addressing potential conflicts with securities laws.
The CFTC currently operates with just two commissioners: Pham and Kristin Johnson. Johnson is expected to depart later this year, further reducing the agency’s capacity.
Former CFTC Chair Rostin Behnam resigned on January 20 when the Trump administration took office. Summer Mersinger and Christy Goldsmith Romero both stepped down in late May.
Trump’s nominee for permanent chair, Brian Quintenz, remains in limbo. The White House intervened to postpone a Senate vote on his nomination last week.
The public comment period closes on August 18, giving stakeholders limited time to provide input on the proposal.
