Quick Overview of New US CFTC Regulations: How Can Foreign Exchanges Legally Enter the US Market, Which Businesses Will Benefit, and What Should Be Focused on in the Short Term?

Original Author: Hunt

Translated by: Azuma, Odaily

Editor's note: In the early hours of today, the U.S. Commodity Futures Trading Commission (CFTC) officially released a guidance, clarifying its Foreign Board of Trade (FBOT) registration rules, providing a legal registration pathway for non-U.S. trading platforms, and allowing U.S. users to trade on such platforms.

The clarification of this rule will undoubtedly bring significant changes to the way U.S. cryptocurrency users trade and the overall competitive landscape of exchanges. Earlier today, cryptocurrency analyst Hunt (@hunt029) published a brief analysis on this topic: What does the new rule mean? What are its limitations? Which businesses will benefit? What changes should be watched in the short term?

Below is the full text of the CFTC announcement and Hunt's analytical interpretation, translated by Odaily.

Full Text of the CFTC Announcement

The U.S. Commodity Futures Trading Commission (CFTC) Division of Market Oversight today issued an advisory regarding the registration framework for Foreign Boards of Trade (FBOT). This framework applies to all non-U.S. entities legally established and operating outside the United States that wish to provide direct market access to users located within the United States. The CFTC’s FBOT registration framework applies to all markets, regardless of asset class, covering both traditional and digital asset markets.

CFTC Acting Chair Caroline D. Pham stated:

“ The FBOT advisory released today provides the regulatory clarity the market needs, enabling trading activities that were previously forced to leave the U.S. due to ‘regulation by enforcement’ to return to the U.S. in a legal manner. By reaffirming the CFTC’s consistent approach—to provide U.S. traders with choices and access to the deepest and most liquid global markets, covering a wide range of products and asset classes—those U.S. companies that were previously forced to set up overseas entities to support crypto asset trading now have a pathway to return to the U.S. market.

As I have said before, the CFTC’s existing registration categories are the simplest and fastest solution. Since the 1990s, Americans have been able to trade on non-U.S. exchanges registered as FBOTs. From now on, the CFTC welcomes Americans who wish to trade efficiently and safely under CFTC regulation, while also opening the U.S. market to the world. This once again demonstrates that the CFTC will continue to support President Trump’s ‘crypto sprint’ initiative.”

As the global derivatives market continues to evolve, new products, asset classes, and trading platforms are emerging both domestically and internationally. The CFTC Division of Market Oversight has received an increasing number of inquiries, including: when FBOT registration is required, and the specific requirements and procedures for obtaining FBOT registration.

Additionally, recent enforcement actions by the CFTC based on new interpretations inconsistent with decades of past practice have caused confusion and disruption regarding whether non-U.S. exchanges should register as Designated Contract Markets (DCM) or FBOTs.

By reaffirming the CFTC’s long-standing FBOT registration framework, this advisory aims to promote regulatory clarity and market access.

Analytical Interpretation

The U.S. Commodity Futures Trading Commission (CFTC) announcement today will allow Americans to legally trade on certain “offshore” crypto exchanges in a much simpler way.

What does this mean? Why is it important? And how might it reshape the market?

Until now, U.S. users often traded on overseas platforms via VPNs or other means—a trading model that carries significant risks. Now, if an overseas exchange registers with the CFTC as an FBOT (Foreign Board of Trade), U.S. traders will be able to access the exchange’s services legally.

It should be made clear that this is not a complete liberalization:

• Only compliant, regulated exchanges are eligible.
• Access is generally required through U.S. brokers or futures firms.
• Unregistered “wild” exchanges remain prohibited for U.S. users.

Why is this important?

• First, liquidity: The inflow of U.S. funds into global markets means deeper order books and less slippage;
• Second, legitimacy: In the future, compliant overseas exchanges will be able to openly serve U.S. clients;
• Third, reducing workarounds like VPNs: Clear rules are always better than various covert workarounds.

Currently, the total market capitalization of the cryptocurrency market is about $3.9 trillion, with Bitcoin (BTC) accounting for about $2.2 trillion (market share 56–57%), and Ethereum (ETH) about $580 billion (market share 14–15%), both near historical highs. Many analysts are optimistic, expecting BTC to reach $150,000–225,000 and ETH to exceed $7,000 by the end of the year.

After the disclosure of the new CFTC rules, both retail and institutional investors will gain safer trading access; the scale of arbitrage and basis trading between the U.S. and global markets is expected to further expand; and exchanges willing to comply with U.S. regulatory rules will find it easier to expand.

However, some things remain unchanged: Perpetual contract (perps) trading services for retail investors must still be conducted on U.S.-regulated futures exchanges (DCMs); suspicious offshore platforms remain within the CFTC’s enforcement scope.

Overall, this CFTC announcement will directly benefit the following groups:

• First, overseas exchanges that can meet FBOT registration standards;
• Second, U.S. brokers who can route client orders to overseas exchanges;
• Third, all trading users sensitive to liquidity—because the new rules mean deeper markets and better pricing.

From the perspective of the macro regulatory environment and industry development, the working model of U.S. regulatory agencies is shifting from “enforcement-only regulation” to “rule-based market access.” This is a structural positive for the adoption, liquidity, and mainstream recognition of cryptocurrencies.

From the perspective of exchange competition, U.S.-based exchanges may have a head start due to existing infrastructure and regulatory experience, but if overseas FBOTs register quickly and provide competitive liquidity, they can also pose a challenge—whoever prioritizes compliant registration to enter the U.S. market may win the competition.

In the short term, the market may need to watch the following three dynamics.

• Which exchanges will be the first to register as FBOTs;
• The next move by the CFTC—whether U.S. futures exchanges will be allowed to launch “spot crypto trading”;
• Whether the SEC will attempt to intervene in this area.

In short, this move by the CFTC opens a two-way channel for Americans and overseas exchanges, allowing U.S. users and global crypto market liquidity to interact in a compliant manner—provided that trading platforms are willing to fulfill all compliance requirements.

The current total size of the cryptocurrency market is close to $4 trillion. As BTC and ETH continue to rise, the regulatory clarity provided by the CFTC may further heat up the market.

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