The US Commodity Futures Trading Commission (CFTC) has recently withdrawn two pieces of crypto-related staff guidance in yet another shift in the country’s regulatory efforts. Both decisions were effective immediately.
Notably, these advisories signaled a significantly increased review of the digital asset sector at the time they came into effect. Therefore, the decision to remove the guidelines indicates a friendlier approach.
This does not mean that the industry is exempt from the CFTC rules, but it may mean that the regulator will finally treat digital asset derivatives like other products it oversees.
On 28 March, the CFTC announced that its Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) withdrew ‘CFTC Staff Advisory No. 18-14, Advisory with Respect to Virtual Currency Derivative Product Listings.’
The regulator stated that,
“DMO and DCR determined that the advisory is no longer needed given additional staff experience with virtual currency derivative product listings and increasing market growth and maturity.”
The accompanying CFTC Staff Advisory, dated 21 May 2018, said it provided guidance to exchanges and clearinghouses on improvements when listing a crypto-based derivative contract. It based these, the regulator said, on its previous experience with digital assets.
“The significant risks associated with virtual currency markets justify close scrutiny by both CFTC staff and registered entities,” it argued.
Therefore, the guidelines included heightened market surveillance by the exchanges, and their “close coordination with CFTC surveillance group.”
Furthermore, futures commission merchants and foreign brokers should provide daily reports. Additionally, the regulator establishes a large trader reporting threshold of 5 BTC or the equivalent value for other crypto.
The goal, it said, is to identify traders who engage in market manipulation.
The CFTC had other guidelines meant to help it keep a close eye on the crypto industry. Yet, with the latest decision, these have all been withdrawn.
Like Any Other Product
On the same day, the CFTC said that DCR withdrew the so-called ‘CFTC Staff Advisory No. 23-07, Review of Risks Associated with Expansion of DCO Clearing of Digital Assets.’
DCR decided to make this move “to ensure that it does not suggest that its regulatory treatment of digital asset derivatives will vary from its treatment of other products,” it stated.
The accompanying letter to the staff is dated 30 May 2023. It “reminds” registrants and applicants that when they decide to expand their businesses, change business models, or offer new products, “DCR will remain focused” on the potentially increased risks that may be associated with clearing activities.
Specifically, they highlighted cyber and other operational risks associated with digital assets.
Therefore, DCR required strict compliance with the Commodity Exchange Act, which regulates commodities and futures trading in the US.
Additionally, the advisory required DCR to work with other relevant CTFC staff on detailed reviews of physical settlement arrangements, or physical deliveries involving digital assets.
Meanwhile, in February 2025, CFTC announced it would host a CEO Forum to discuss the launch of its digital asset markets pilot program. Participants will include Circle, Coinbase, Crypto.com, MoonPay, and Ripple. Further information will be available once CFTC finalizes the details, it said.
Previously, Acting Chairman Pham proposed the CFTC pilot program in 2023. She described it as a US regulatory sandbox that would provide regulatory clarity for the crypto industry.
Additionally, in November 2024, the CFTC’s Global Markets Advisory Committee released its Digital Asset Markets Subcommittee’s recommendation on expanding the use of non-cash collateral through DLT.
Furthermore, in mid-March, crypto derivatives exchange Bitnomial launched its XRP futures contract. This is the first-ever US CFTC-regulated XRP futures product.
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