CFTC | Crypto

The classification could assist the CFTC’s claim that it has exclusive federal jurisdiction over event contracts offered on regulated prediction markets. The US Commodity Futures Trading Commission is seeking to clarify the definition of a “swap” amid a jurisdictional fight with state gambling regulators over prediction markets.  An Office of Information and Regulatory Affairs docket shows the agency has submitted a proposed rule to expand the definition of “swap” to include event contracts, along with an interim final rule that would exclude casino-style gambling products. Both are under review.  The classification matters because the CFTC has argued that federal law gives it exclusive authority over swaps traded on its regulated exchanges, such as those offered by Polymarket and Kalshi. US state regulators have disputed that position, particularly for sports event contracts, arguing they are subject to state gambling laws.  Read more

As it battles with states over prediction markets, the CFTC sent two related rules on swaps definitions for White House review.

Seven commissioner seats at the SEC and CFTC will be empty after Friday, leaving only a few leaders at financial regulators to oversee aspects of the $3 trillion crypto industry. Update (Sept. 29, 8:45 pm UTC): This article has been updated to include a response from the CFTC. Two of the United States’ financial agencies tasked with overseeing and enforcing digital asset regulation will be down to just three commissioners after Friday, following the departure of a Republican member. On Friday, Hester Peirce, who served as a commissioner with the US Securities and Exchange Commission (SEC) for eight years, will leave the agency about two months before the end of the 18-month extension for her second term. The departure of Peirce, whom many in the industry knew as “Crypto Mom” for her views on digital assets, will mark only the second time in US history the agency has operated with two commissioners. Read more

Coinbase joins Kraken in bringing US derivatives infrastructure in-house, after Kraken’s parent acquired Bitnomial and its CFTC-regulated exchange, clearinghouse and brokerage in May. Coinbase has received approval from the Commodity Futures Trading Commission (CFTC) to launch Coinbase Clearing LLC, its own US-based derivatives clearing organization.  The registration became effective Monday, permitting the clearinghouse to clear fully collateralized futures, options on futures and swaps, though the registration does not permit the clearinghouse to clear its leveraged products.  “Today’s CFTC approval completes Coinbase’s end-to-end derivatives infrastructure, enabling us to bring more regulated derivatives products to market with native USDC collateral and 24/7 settlement,” said Molly Abraham, Coinbase’s general counsel. Read more

With the failed cloture vote on the CLARITY Act, the SEC announced updates on how federal securities laws could apply to token issuers, following similar guidance from the CFTC. The US Securities and Exchange Commission (SEC) updated its policies on how securities laws will apply to “certain types of crypto assets and certain transactions involving crypto assets,” following a similar move by the country’s federal commodities regulator last week. In a Friday update to the SEC’s frequently asked questions issued in March, the agency said that the latest interpretation of its rules on crypto was non-binding, had “no legal force or effect, [did] not alter or amend applicable law, and [did] not create any new or additional obligations for any person.” The FAQs would apply to how the SEC considers digital asset products falling under the Howey test for investment contracts.  According to the SEC, token issuers could conduct buyback programs for customers provided “a crypto system is functional and has no central pa...

The CFTC claimed that Cash FX engaged in minimal forex trading and misappropriated most of the participant funds. The Commodity Futures Trading Commission said it is suing Cash FX Group and three individuals in a $950 million foreign-exchange investment case involving cryptocurrency. The defendants are Cash FX and its CEO Huascar Jose Lopez Castillo of Brazil, The Conversion Pros and its CEO Ronald Pope of Oregon, and Justin Halladay of Florida. The CFTC said its complaint was filed Friday in the US District Court for the Middle District of Florida. It alleges the defendants operated a multilevel marketing Ponzi scheme, soliciting and accepting over $950 million for the purported purpose of trading retail foreign currency contracts in a commodity pool.  Read more

OG.com, recently spun out of Crypto.com, joins Coinbase, Kalshi and Kraken parent Payward in seeking approval to bring perpetual futures to individual US stocks. OG.com Markets is seeking US regulatory approval to offer perpetual futures tied to individual stocks, as trading platforms push to bring the popular derivatives product to US equity markets. In a Thursday filing with the Commodity Futures Trading Commission (CFTC), OG.com proposed new rules allowing it to list cash-settled single-stock futures that never expire and can trade 24 hours a day, five days a week. OG.com was recently spun out of crypto exchange Crypto.com as an independent prediction markets and derivatives platform valued at $5 billion. At the time, CEO Kris Marszalek said the platform planned to expand beyond prediction markets into futures and perpetual contracts. Read more

Although the CFTC chair did not say the failed vote on the CLARITY Act was behind new rules for authorized crypto entities, he said the move was “to provide regulatory clarity.“ The US Commodity Futures Trading Commission (CFTC) has updated its guidance on tokenized assets and using blockchain technology for recordkeeping. In a Thursday notice, the CFTC said that it had updated information under its frequently asked questions on registered crypto-related entities.  The guidance originally released in March was updated to specify that authorized companies could invest customer funds in tokenized forms, provided “the tokenized form of the asset grants the holder legal and economic rights that are the same or functionally equivalent to the rights received by holders of the asset in its traditional form.” The regulator added that it “would not object” to companies utilizing blockchain-based recordkeeping under the new rules. Read more

The Sept. 22 advisory asks exchanges to explain contract-specific safeguards while Kalshi continues to list speech markets. The post CFTC staff presses exchanges on political speech prediction market bets, asks how to prevent manipulation appeared first on CryptoSlate.

Kalshi said nearly $5 billion in similarly sized Ether perpetual trades reflected its liquidity incentive programs and rejected allegations that the activity was wash trading. Prediction markets operator Kalshi said it has not been contacted by the Commodity Futures Trading Commission and does not believe there is any formal examination, after a report that the regulator was reviewing a flurry of trading activity in its Ether perpetual futures market.  On Tuesday, The Wall Street Journal reported that the CFTC is examining a pattern of rapid trades clustered around $5,500, citing a person familiar with the matter. The trading pattern has prompted allegations of wash trading.  The scrutiny comes as Kalshi has reported rapid growth in its perpetual futures business. A week after launching its perpetual futures markets in May, the company told CNBC that trading volume had surpassed $1 billion. Read more

Michael Selig said tokenization could reshape financial markets as the CFTC and SEC continue advancing onchain initiatives despite the CLARITY Act setback. US Commodity Futures Trading Commission (CFTC) Chair Michael Selig said financial markets should prepare for “mass tokenization” as regulators adapt existing frameworks for blockchain, artificial intelligence and onchain markets. In remarks delivered Tuesday at the US Treasury Market Conference, Selig said tokenization of real-world assets (RWAs) could become the foundation of a more efficient financial system, enabling near-instant settlement and real-time collateral movement between clearinghouses, intermediaries and users.   “Just as the transition from hand signals to electronic trading advanced our financial system, I believe tokenization can do the same for all asset classes,” Selig said, adding that the CFTC would pursue principles-based rules as tokenization and onchain finance evolve. Read more

The warning comes weeks after the CFTC fined a former White House teleprompter operator who made more than $107,000 trading prediction contracts tied to President Trump’s speeches. The top US derivatives regulator has warned that prediction market contracts tied to what a person says or does carry a heightened risk of manipulation, putting exchanges on notice as the industry faces increasing scrutiny over market integrity.  The Commodity Futures Trading Commission’s Division of Market Oversight on Tuesday said it issued an advisory to some of its regulated entities, advising that there are only “limited circumstances” in which “mention markets” — event contracts based on whether an individual will say certain words, attend or appear at an event or interact with another person — can be listed consistently with the Commodity Exchange Act.  “These contract types present a heightened risk of manipulation because their settlement turns on the discrete conduct of a person that may be neither independently generated...

The cash-settled contracts would offer price exposure without ownership or delivery of the underlying shares. The post Coinbase targets stock futures but CFTC standstill blocks launch appeared first on CryptoSlate.

The Clarity Act failed to advance in the Senate, shifting the industry’s focus to a new wave of action from the SEC and CFTC.

The US commodities regulator submitted a new crypto market regulatory action for White House review days after the Senate failed to advance the CLARITY Act. The US Commodity Futures Trading Commission has submitted a new regulatory action covering crypto asset transactions and markets for White House review, as the agency moves forward with its approach to overseeing the digital asset sector. According to a filing with the Office of Information and Regulatory Affairs, the action, titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets,” was received on Sept. 17 and is listed at the “prerule” stage. The designation indicates the action is at an early stage of the rulemaking process and has not yet been formally proposed. The filing does not disclose details of the planned regulation, but comes days after the Senate failed to advance the CLARITY Act, legislation aimed at establishing a federal regulatory framework for crypto markets. Read more

Tokenized stocks and wallet-linked derivatives can launch under new relief, while durable rights and jurisdiction remain unresolved. The post SEC and CFTC bypass Congress to open crypto access after CLARITY fails – with a catch appeared first on CryptoSlate.

The US regulator’s move could make it easier for crypto wallets and other apps to offer access to regulated derivatives and prediction markets without registering as introducing brokers. The Commodity Futures Trading Commission (CFTC) has expanded regulatory relief for “passive software” providers that connect users to regulated derivatives firms and exchanges. In a no-action position issued Thursday, the agency’s Market Participants Division said it would not recommend enforcement against qualifying providers or their personnel for failing to register as introducing brokers or associated persons when facilitating trading with CFTC-registered firms and exchanges. The position could make it easier for crypto wallets and other apps to offer access to regulated derivatives, including perpetual contracts and prediction markets, without becoming CFTC-regulated introducing brokers themselves. Read more

Bernstein said the federal agencies will publish new regulations to compensate for the time lost negotiating the CLARITY Act, after its cloture vote failed on Tuesday. Bernstein analysts expect “aggressive and swift” rulemaking from the US Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), after the Digital Asset Market Clarity (CLARITY) Act failed to pass a Senate cloture vote on Tuesday. Bernstein analysts said the regulatory agencies will publish new regulations to “make up for the time lost negotiating the CLARITY Act,” in a Wednesday note shared with Cointelegraph. The analysts said they expect agency regulations including token taxonomy for raising capital, developer protection measures concerning decentralized finance and self-custodial protocols, innovation exemptions for equity tokenization, faster approval times for real-world asset perpetual futures, and amendments to rules around federal sports even contracts and their classification as swaps. Read more

The CFTC’s lawyers called the lawsuit “much ado about nothing,“ claiming that the CME Group lacked standing to file and argued against its claims over crypto perpetual futures. The US Commodity Futures Trading Commission (CFTC) has filed a motion to dismiss a civil suit filed by the Chicago Mercantile Exchange (CME) Group, which claimed that the regulator’s treatment of cryptocurrency “futures” as “swaps” went against Congress. In a Wednesday filing in the US District Court for the District of Columbia, lawyers representing CFTC Chair Michael Selig and the commission requested a hearing to address the motion to dismiss the CME lawsuit, claiming the group lacked standing.  CME filed suit against the CFTC in June after the commission approved perpetual futures contracts tied to the spot price of Bitcoin (BTC) for prediction markets platform Kalshi and issued a no-action position for similar products on cryptocurrency exchange Coinbase. The June complaint argued that Selig had unilaterally acted without a full p...

Kalshi reportedly plans to file for approval of a WTI crude oil perpetual futures contract that would trade around the clock five days a week without an expiration date. Prediction market operator Kalshi will reportedly seek regulatory approval for a West Texas Intermediate (WTI) crude oil perpetual futures contract that never expires. The contract could be filed with the Commodity Futures Trading Commission (CFTC) as soon as next week, a person familiar with the matter told Bloomberg. It would trade 24 hours a day, five days a week, according to Reuters. If approved, it would be the first oil-linked perpetual futures product to trade on a regulated US platform. Read more