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CFTC May Approve Foreign Crypto Exchanges Under U.S. Rules — What It Means for Traders

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The Commodity Futures Trading Commission (CFTC) is weighing approval for international crypto exchanges to function below U.S. regulatory frameworks, Acting Chairman Caroline D. Pham mentioned on September 8

Speaking earlier than the UK Parliament’s All-Party Parliamentary Group on Blockchain Technologies, Pham outlined a cross-border framework that would widen market entry for American merchants and convey offshore exercise again below U.S. oversight.

This got here barely per week in the past when the CFTC issued an advisory permitting international boards of commerce to supply U.S. merchants direct market entry.

The strategy would construct on the CFTC’s long-standing framework for international boards of commerce, often known as FBOTs, which has been in place for the reason that Nineteen Nineties. Under this technique, abroad exchanges can serve U.S. clients if their dwelling jurisdictions meet comparable regulatory requirements.

Extending recognition to certified international platforms would mark a serious enlargement of the CFTC’s cross-border attain.

Pham argued the strategy may assist stem the outflow of U.S. crypto buying and selling exercise to offshore exchanges and as an alternative convey these markets below a regulatory umbrella that aligns with American guidelines. She described the framework as probably the most sensible solution to repatriate buying and selling quantity with out ready for prolonged legislative modifications or new bilateral agreements.

CFTC Eyes Global Crypto Alignment as Pham Urges U.S. to Welcome Back Firms

In her speech, Acting Chairman Caroline D. Pham famous that many American crypto companies moved operations overseas lately, citing a scarcity of clear guidelines within the United States. Jurisdictions in Europe, Asia, and the Middle East developed digital asset frameworks that drew corporations away. She famous that the U.S. can not delay welcoming platforms that need to make investments, rent, and construct within the U.S

Her name comes on the heels of the President’s Working Group on Digital Asset Markets report, which units out a imaginative and prescient for what officers have described as a “Golden Age of Crypto.”

The report urges Washington to modernize financial institution oversight, strengthen the greenback’s position in world finance, implement strong taxation, and fight illicit use, all whereas giving the SEC and CFTC a mandate to make use of present powers to authorize digital asset buying and selling below clear federal requirements.

That would imply guidelines round custody, registration, buying and selling, and recordkeeping can be streamlined for companies looking for entry into the U.S. market.

Pham additional famous that the CFTC will contemplate whether or not platforms approved below the European Union’s Markets in Financial Instruments Directive (MiFID) or the Markets in Crypto-Assets Regulation (MiCA) qualify for entry. Other jurisdictions with equal regimes is also acknowledged.

Major exchanges equivalent to Kraken, KuCoin, Coinbase, OKX, Crypto.com, and Gemini have already pursued MiFID and MiCA approvals, increasing their attain throughout Europe below these regimes.

According to Pham, these frameworks already embody necessities on capital, danger administration, custody, and retail protections. Aligning them with U.S. guidelines would assist keep away from market fragmentation and enhance world coordination.

CFTC and SEC Push “Crypto Sprint” as Global Crackdown on Offshore Exchanges Intensifies

The CFTC and Securities and Exchange Commission (SEC) are accelerating efforts to convey readability to U.S. digital asset markets by means of a joint “Crypto Sprint” initiative.

The SEC has launched “Project Crypto,” whereas the CFTC has opened consultations on buying and selling guidelines, with each companies working towards harmonizing product definitions, reporting obligations, and capital necessities.

The push displays a rising shift to combine crypto markets below present U.S. securities and futures legal guidelines. Just final week, the SEC and CFTC collectively affirmed that registered exchanges are permitted to list and trade certain spot digital assets, successfully folding them into long-standing investor protections and compliance requirements.

A joint SEC-CFTC roundtable will happen Sept. 29 to debate regulatory alignment, together with the position of decentralized finance. Last week, U.S. senators revised the Responsible Financial Innovation Act of 2025 to make clear SEC and CFTC roles and add protections for DeFi and rising blockchain sectors.

Meanwhile, the companies lately issued a joint workers assertion clarifying that present U.S. legislation permits registered exchanges to facilitate sure spot crypto trades.

Additionally, the CFTC has opened a public session on listed spot crypto buying and selling and different proposals from the President’s Working Group on Digital Asset Markets.

The U.S. coverage dash arrives as regulators worldwide step up scrutiny of offshore exchanges. Bybit resumed its trading app in India after paying a 9.27 crore rupee ($1.06 million) fantastic for violating anti-money laundering guidelines.

Meanwhile, South Korea’s Financial Intelligence Unit (FIU) is investigating unregistered overseas crypto exchanges, together with BitMEX, KuCoin, CoinW, Bitunix, and KCEX, for focusing on native customers with out VASP registration.

In 2023, Taiwan’s Financial Supervisory Commission (FSC) planned to restrict offshore crypto exchanges except they register domestically, aiming to enhance disclosure, set itemizing requirements, and guarantee correct custody of shopper belongings.

The publish CFTC May Approve Foreign Crypto Exchanges Under U.S. Rules — What It Means for Traders appeared first on Cryptonews.

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