CFTC is mulling a cross-border regime that could allow U.S. customers to trade directly on select international crypto exchanges, provided those platforms operate under regulatory standards deemed comparable to American rules.
- CFTC is considering extending its Foreign Boards of Trade framework to crypto exchanges, allowing U.S. clients to trade on select offshore platforms.
- Acting Chair Caroline Pham said the approach would provide regulatory clarity, countering “regulation by enforcement” that has pushed activity overseas.
- The plan could recognize EU-licensed venues under MiFID or MiCA, offering them a compliant path into the U.S. market.
In a recent speech before the U.K. All-Party Parliamentary Group on Blockchain Technologies, Acting CFTC Chair Caroline Pham laid out a possible pathway for U.S. oversight of offshore crypto exchanges.
Pham said the agency is weighing whether its long-standing framework for Foreign Boards of Trade could be extended to digital asset platforms. The framework, established in the 1990s to recognize overseas derivatives markets, could open the door for U.S. customers to access certain non-U.S. exchanges if those venues meet regulatory standards comparable to American rules.
“By using this framework to provide regulatory clarity for non-U.S. exchanges, whether traditional or digital asset markets, that are in jurisdictions with comparable regulatory regimes to the U.S., this is the fastest way that we can legally onshore trading activity efficiently and safely under CFTC regulations and open up U.S. markets to the rest of the world.” Pham said.
Why Pham is pushing for the cross-border approach
Acting Chair Pham’s push for this framework is a direct response to what she termed the “destructive regulation-by-enforcement policy” of the recent past, which she argues crippled domestic innovation and drove talent overseas.
Pham explained that the existing framework for foreign boards of trade provides a durable, flexible, and technology-neutral path to avoid the market fragmentation that plagued post-Dodd-Frank reforms. This approach is central to the CFTC’s broader “Crypto Sprint” initiative, designed to swiftly implement the Trump administration’s pro-innovation crypto roadmap, the acting chair said.
“That is why I believe that we should use our existing registration categories for brokers, dealers, exchanges, and other market participants because the CFTC’s cross-border approach to foreign markets, products, and intermediaries has been in place for decades,” Pham noted.
For an EU-based crypto derivatives venue, the CFTC would consider platforms authorized under the Markets in Financial Instruments Directive (MiFID) as a regulated market (RM) or a multilateral trading facility (MTF). These established venues could seek access for U.S. participants under the CFTC’s framework for FBOTs or exempt swap execution facilities (SEFs).
Notably, in a significant expansion, the agency will explore whether trading platforms operating under the EU’s bespoke Markets in Crypto-Assets Regulation (MiCA) could qualify.
From enforcement-first to proactive recognition
Two weeks before Pham’s London remarks, the CFTC issued an advisory reaffirming its foreign board of trade regime. That statement was aimed at reversing what Pham called the “enforcement-first” posture of recent years, which has left firms uncertain about where they stand. The Commission’s own enforcement record tells the story.
In 2023, the CFTC’s Division of Enforcement, under Director Ian McGinley, had prioritized digital asset cases, which grew to comprise nearly half its docket. The agency secured a $1.7 billion fraud case tied to Mirror Trading, sued Voyager’s former chief executive for lending hundreds of millions in customer assets to risky counterparties, and charged Celsius and its former CEO over alleged misrepresentations tied to $20 billion in deposits.
The most high-profile action was a landmark anti-evasion case against Binance, its then-CEO Changpeng Zhao, and its chief compliance officer. Regulators alleged the exchange actively solicited U.S. customers while coaching them to evade compliance through VPNs and shell companies. The case resulted in a $2.85 billion settlement with the agency and a total of $4.3 billion across U.S. authorities.
This case, and others like it, created a chilling effect of legal uncertainty that Pham is now seeking to thaw with a clear, forward-looking regulatory pathway, moving the agency from a role of prosecutor to that of an architect for lawful market access.
