CFTC guideline invites foreign exchanges under FBOT framework

• The US CFTC released a guideline clarifying that residents can begin trading on foreign exchanges via a new FBOT framework.
• The FBOT framework applies to all markets, including digital assets, and aims to provide regulatory clarity.
• The regulator added that there has been confusion over whether foreign exchanges could operate in the US.

The Commodity Futures Trading Commission (CFTC) issued a Staff Letter on Thursday clarifying that foreign exchanges, including crypto-focused entities, can begin offering their products to US residents under its foreign board of trade (FBOT) registration framework.

CFTC plans to allow trading on foreign exchanges via new guideline

The CFTC's Division of Market Oversight has set a structured path for overseas exchanges to access US markets via its foreign boards of trade (FBOT) registration framework, according to a statement on Thursday. 

The framework spans various asset classes, encompassing both traditional markets and cryptocurrency exchanges. The advisory stems from a growing number of inquiries from offshore exchanges on the steps to take for the FBOT framework and when it applies.

"Today's FBOT advisory provides the regulatory clarity needed to legally onshore trading activity that was driven out of the United States due to the unprecedented regulation by enforcement approach of the past several years," said Acting Chair Caroline D. Pham.

Pham added that the framework could help attract crypto companies that "were forced to set up shop in foreign jurisdictions" to gain a clear path to the US.

FBOT aims to provide regulatory clarity for non-US trading platforms to register with the CFTC when providing direct access to US-based traders.

The regulator added that recent enforcement actions against offshore exchanges created confusion over whether these platforms should register as a designated contract market (DCM) or as an FBOT.

Pham hinted that the new approach is tailored toward crypto ventures, drawing from the President Trump administration's goal to make the US the world's crypto capital.

"It's just another example of how the CFTC will continue to deliver wins for President Trump as part of our crypto sprint," Pham added.

The move comes as regulators race to provide clear rules and guidelines for the crypto industry. The Securities and Exchange Commission (SEC) has also issued guidelines to clarify its new crypto stance under Chair Paul Atkins.

US legislators are also rallying to establish laws for the crypto market, including the , which regulates the stablecoin sector.

The market structure CLARITY bill also seeks to oversee the crypto market and provide clarity on the regulatory jurisdiction of the SEC and CFTC over digital assets. The bill awaits deliberation and final vote from the Senate after passing through the House with bipartisan support.