CFTC Clears Path for U.S. Traders on Foreign Crypto Exchanges

- The U.S. CFTC provides new guidance for foreign crypto exchanges to serve American traders. - Registered FBOTs can operate without requiring additional DCM registration. On August 28, 2025, the U.S. Commodity Futures Trading Commission (CFTC) issued a staff advisory to offer greater regulatory clarity for non-U.S. crypto exchanges. The announcement clarifies that foreign exchanges registered under the foreign board of trade (FBOT) system can now legally provide trading services to American customers without needing to register as designated contract markets (DCMs). Acting Chair Caroline Pham highlighted that the move reinforces the CFTC's commitment to facilitating American traders' access to global markets. This advisory signifies a notable departure from the enforcement-heavy approach under prior administrations, indicating a shift toward a more crypto-friendly regulatory environment. Previously, several exchanges faced legal actions for operating in the U.S. without proper authorization, which pushed a significant portion of crypto trading activity offshore. As a result, this new framework empowers FBOT-registered exchanges to legally "onshore" crypto trading activity, potentially driving greater participation within the U.S. market. The announcement is part of the CFTC's broader “crypto sprint” initiative, which aims to establish clearer regulatory guidelines for the digital asset industry. By delivering explicit rules for foreign entities, the CFTC hopes to facilitate innovation and bolster the United States' position in global trading. Acting Chair Pham reiterated that the advisory aligns with the agency's mission to integrate domestic and international markets seamlessly and signals a focus on fostering cross-border financial innovation.