Why CFTC's FBOT Rules Can’t Lure Offshore Crypto Platforms

- FBOT rules are rooted in legacy finance; experts claim they don’t fit crypto. - CFTC’s broader ‘crypto sprint’ accelerates regulatory overhaul. The Commodity Futures Trading Commission (CFTC) issued an advisory on its Foreign Board of Trade (FBOT) framework, aiming to regulate offshore cryptocurrency exchanges that serve U.S. residents. However, legal experts argue the framework's requirements are impractical for cryptocurrency platforms because the rules were designed for traditional financial systems. On September 6, 2025, Cointelegraph reported that Eli Cohen, general counsel at Centrifuge, highlighted several challenges the FBOT framework poses, explaining that its stipulations for settlement, clearing, and other regulations are difficult or impossible for crypto exchanges to meet. Furthermore, the framework mandates that only regulated exchanges outside the United States can apply for FBOT registration, a condition many offshore platforms avoid because they operate in jurisdictions with limited regulation. Cohen suggested that a crypto market structure bill passed by Congress would provide clearer, more effective regulatory guidance for the industry. The FBOT advisory is part of the CFTC's broader "crypto sprint," an ongoing effort to overhaul cryptocurrency regulations that aligns with recommendations from a previous administration report calling for joint oversight by the Securities and Exchange Commission (SEC) and the CFTC. Under this initiative, collaborative proposals include enabling 24/7 trading cycles for all asset classes, a change that would align with the continuous trading model favored by digital assets.