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1.11 - Commodity Futures Trading Commission (CFTC)

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Overview

The CFTC is the federal agency that regulates the U.S. derivatives markets, including futures, swaps, and commodity options. Each of those assets must be traded on organized and regulated exchanges pursuant to the Commodity Exchange Act (CEA), 7 U.S.C. § 1arrow-up-right. The CFTC also has general anti-fraud and anti-manipulation authority over “any . . . contract of sale of any commodity in interstate commerce.” 7 U.S.C. § 9(1)arrow-up-right. The CEA defines a commodity as a wide variety of farm products and “all other goods and articles, . . . and all services, rights, and interests . . . in which contracts for future delivery are presently or in the future dealt in.” 7 U.S.C. § 1a(9)arrow-up-right.

The CFTC started becoming extremely active in regulatory oversight of cryptocurrencies as commodities in late 2014 and early 2015. By September of 2015, the CFTC concluded explicitly that “Bitcoin and other virtual currencies are encompassed in the definition and properly defined as commodities,” but provided no other analysis at the time as to why that was the case. See In re Coinflip, Inc. d/b/a Derivabit, and Francisco Riordanarrow-up-right, CFTC Docket No. 15-29, at 3 (2015.09.17).

Since 2015, the CFTC’s outpouring of statements, remarks, testimony before Congress, guidance, and enforcement actions has rendered it second only to the SEC in sheer volume of work in regulating a new asset class. The CFTC — the only federal agency to do so — has even gone as far as proposing in the Federal Register an interpretation of its regulations for retail commodity transactions that include “actual delivery” of digital assets, seeking comment, and then publishing a final interpretive guidance. That guidance clarifies the agency’s position on the distinction between cash or spot markets on the one hand (to which the CFTC’s oversight is limited to fraud or market manipulation), and futures markets on the other (over which the CFTC exercises almost exclusive regulatory authority).

More recently, the CFTC asserted that “[w]hile its regulatory oversight authority over commodity cash markets is limited, the CFTC maintains general anti-fraud and manipulation enforcement authority over virtual currency cash markets as a commodity in interstate commerce.” CFTC, The CFTC’s Role in Monitoring Virtual Currenciesarrow-up-right, at 2 (2020). That statement came after two federal trial courts agreed with its position. See CFTC v. Patrick K. McDonnell & Cabbagetech, Corp. d/b/a Coin Drop Marketsarrow-up-right, 287 F. Supp. 3d 213, 228 (E.D.N.Y. 2018.03.06) (“Virtual currencies can be regulated by CFTC as a commodity. Virtual currencies are ‘goods’ exchanged in a market for a uniform quality and value.”); CFTC v. My Big Coin Pay, Inc.arrow-up-right, No. 1:18-cv-10077-RWZ, at 5–8 (D. Mass. 2018.09.26) (concluding that commodities are defined by categories or classes, not individual items, and because “My Big Coin is a virtual currency and it is undisputed that there is futures trading in virtual currencies” the CFTC sufficiently alleged it was a “commodity” subject to its enforcement authority).

Since 2022, the CFTC's role in digital asset regulation has expanded dramatically. Under Chairman Rostin Behnam (through January 2025), digital asset enforcement accounted for nearly half of the agency's total enforcement actions, including record-breaking settlements against Binance ($2.85 billion) and a $12.7 billion judgment against FTX — the largest in CFTC history. The agency also brought the first enforcement action against a decentralized autonomous organization (DAO), establishing that DAOs are "persons" under the CEA. In December 2025, the CFTC achieved a long-sought milestone when spot cryptocurrency products began trading for the first time on CFTC-registered futures exchanges. In January 2026, CFTC Chairman Michael Selig and SEC Chairman Paul Atkins jointly announced "Project Crypto," a cooperative effort to harmonize federal oversight of digital asset markets and develop a unified token taxonomy.

The vast majority of the CFTC's earlier work in this area — much like its initial determination of virtual currency's status as a commodity — was through enforcement actions against market participants, largely in the areas of fraudulent schemes, failure to register, off-exchange transactions, price manipulation, and KYC/CIP/AML failures. See Nat’l Law Review, The CFTC’s Approach to Virtual Currenciesarrow-up-right (2020.12.21). The CFTC’s overarching approach is thus quite similar to the SEC, and the agencies have repeatedly acknowledged the coordination of their efforts in this space. See, e.g., CFTC, FinCEN, and SEC, Joint Statement on Activities Involving Digital Assetsarrow-up-right (2019.10.11).

Guidance

Primer on Virtual Currencies

The CFTC began its public guidance with its primer on virtual currencies in 2017. CFTC, A CFTC Primer on Virtual Currenciesarrow-up-right (2017.10.17). The primer lays out the basics of cryptocurrencies and the blockchain and then set forth plainly the CFTC’s position that: (1) virtual currencies are commodities; (2) the CFTC has jurisdiction over virtual currencies “when a virtual currency is used in a derivatives contract, or if there is fraud or manipulation involving a virtual currency traded in interstate commerce.” Id.arrow-up-right at 11. It further provided the important caveat that “the CFTC generally does not oversee ‘spot’ or cash market exchanges and transactions involving virtual currencies that do not utilize margin, leverage, or financing.”

It also gave examples of activity that would trigger enforcement action: price manipulation; pre-arranged/wash trading in an exchange-traded virtual currency swap or futures contract; unregistered options/futures trading; and off-exchange, financed transactions targeted to retail customers. Id.arrow-up-right __ at 13.

Background on Self-Certified Contracts for Bitcoin Products

Two months later, the CFTC provided a brief but interesting behind the scenes look at how the Chicago Mercantile Exchange and the CBOE Futures Exchange self-certified new contracts for bitcoin futures products and the Cantor Exchange self-certified a new contract for bitcoin binary options. CFTC, Office of Public Affairs, CFTC Backgrounder on Self-Certified Contracts for Bitcoin Productsarrow-up-right (2017.12.01).

Despite the normal one-day listing period for self-certification to bring new products to market, all three exchanges worked directly with the CFTC in advance, providing it “with advanced draft contract terms and conditions for their bitcoin contracts.” Id.arrow-up-right at 1. That enabled “many discussions” regarding the contracts, compliance concerns, and systemic impacts. Two of the exchanges provided the CFTC “with information about how they intend to manage risks associated with bitcoin futures,” while the other planned to fully margin its contracts and thus did “not raise the same type of risk issues.” Id.arrow-up-right Those subject to the the CFTC’s jurisdiction would likely do well to follow a similar approach to avoid significant scrutiny and fines down the road.

Further Refining Its Guidance

In the first half of 2018, the CFTC provided further guidance to its approach to regulating virtual currencies. It asserted that it would do so through a five-pronged approach: (1) consumer education; (2) asserting legal authority; (3) market intelligence; (4) robust enforcement; and (5) government-wide coordination. Among those prongs, the CFTC twice mentioned that it would focus on fraud and manipulation, particularly in spot or cash markets. CFTC, Office of Public Affairs, CFTC Backgrounder on Oversight of and Approach to Virtual Currency Futures Marketsarrow-up-right, at 1–2 (2018.01.04)

It also clarified that the process it had engaged in with the exchanges that had self-certified futures products, indicating that it had devoted a team to engage in “heightened review” of these products. That heightened review involves the staff checking for: (1) substantially high initial and maintenance margin for cash-settled Bitcoin futures; (2) large trader reporting thresholds at five bitcoins or less; (3) information sharing agreements with spot market platforms; (4) price settlement data monitoring; (5) agreement to engage in inquiries even at the trade settlement level; (6) agreement to regular coordination with the CFTC surveillance staff on trade activities; and (7) coordinating product launches to enable “minute-by-minute” moniotring by the CFTC. Id.arrow-up-right at 3.

It also issued a separate guidance “to exchanges and clearinghouses on certain enhancements when listing a derivative contract based on virtual currency” through self-certification or voluntary submission for CFTC review and approval. CFTC, Staff Advisory No. 18-14, Advisory with Respect to Virtual Currency Derivative Product Listingsarrow-up-right (2018.05.21). This additional guidance reiterated in further detail the points above, and added the expectation that (a) exchanges launching new products also seek feedback on the potential product not just from those interested in trading it, but also “members and other relevant stakeholders,” and (b) derivatives clearing organizations have robust risk managements programs in place that demonstrate margin requirements are sufficient to “to adequately cover potential future exposures to clearing members based on an appropriate historic time period.” Id.arrow-up-right at 5–6.

Accepting Virtual Currencies from Customers Into Segregation

In late 2020, the CFTC provided guidance to futures commission merchants (FCMs) on accepting virtual currencies from their customers. CFTC, Division of Swap Dealer and Intermediary Oversight, Accepting Virtual Currencies from Customers into Segregationarrow-up-right (2020.10.21). The guidance was aimed at ensuring FCMs maintain adequate reserves to cover losses caused by defaulting customers, recognizing the potential increased risks that the volatile value of virtual currency poses for FCMs’ ability to do so.

To that end, the CFTC listed 12 different criteria for FCMs accepting virtual currency from customers and holding it as segregated funds. Among those requirements are that the deposits be into a traditional financial institution, another FCM, or another clearing organization; the funds must be deposited into a separate account that clearly identifies the customer; the FCM’s own virtual currency holdings cannot be deposited into customer accounts for any reason; the amount of currency “reasonably relates” to the amount to the customer’s level of trading; and the FCM must provide 45 days’ “prior written notice to all futures and cleared swaps customers that the FCM will begin accepting virtual currency as of a specified date.” Id.arrow-up-right at 3–6.

Curiously, the guidance applies only to futures contracts that provide for the "physical delivery" of the underlying virtual currency. Id.arrow-up-right at 1. The CFTC does not define what "physical delivery" means in this context. Presumably it means something akin to actual delivery of the virtual currency.

Technology Advisory Committee DeFi Report (2024)

On January 8, 2024, the Digital Assets and Blockchain Technology Subcommittee of the CFTC's Technology Advisory Committee (TAC) released a landmark 79-page report on decentralized finance — the first substantial report on DeFi by a federal government advisory committee. CFTC, Technology Advisory Committee, DeFi Reportarrow-up-right (2024.01.08). The report recommended that the CFTC conduct resource assessment and data gathering on DeFi protocols, survey existing regulatory perimeters to identify gaps, develop continuous monitoring and information-sharing partnerships, and evaluate international peer jurisdictions' approaches to DeFi regulation.

Separately, the Global Markets Advisory Committee (GMAC) — whose Digital Asset Markets Subcommittee (DAMS) was sponsored by Commissioner (later Acting Chairman) Caroline Pham — advanced a recommendation in November 2024 on expanding the use of non-cash collateral through distributed ledger technology (i.e., tokenized collateral). CFTC, Release No. 9009-24, GMAC Advances Tokenized Non-Cash Collateral Recommendationarrow-up-right (2024.11.21). This recommendation became a key foundation for subsequent CFTC actions permitting digital assets as margin collateral.

Digital Asset Collateral and Pilot Programs (2025)

In December 2025, as part of Acting Chairman Pham's "Crypto Sprint" initiative, the CFTC issued several significant guidance actions. CFTC Staff Letter No. 25-40 provided no-action relief allowing futures commission merchants to accept Bitcoin, Ether, and payment stablecoins as margin collateral through a three-month pilot program. CFTC, Staff Letter No. 25-40arrow-up-right (2025.12.08). CFTC Staff Letter No. 25-39 provided technology-neutral guidance on the use of tokenized assets as collateral for futures and swaps. CFTC, Staff Letter No. 25-39arrow-up-right (2025.12.08). And CFTC Staff Letter No. 25-41 withdrew the prior 2020 constraints on FCMs accepting customer digital assets. CFTC, Staff Letter No. 25-41arrow-up-right (2025.12.08).

The CFTC also launched a Digital Assets Pilot Program permitting certain digital assets — including BTC, ETH, and USDC — to be used as collateral in derivatives markets. CFTC, Release No. 9146-25, Acting Chairman Pham Announces Launch of Digital Assets Pilot Programarrow-up-right (2025.12.04).

Withdrawal of Outdated Guidance (2025)

Acting Chairman Pham announced the withdrawal of several outdated digital asset guidance documents as part of the Crypto Sprint. CFTC, Release No. 9152-25, Acting Chairman Pham Announces Withdrawal of Outdated Digital Assets Guidancearrow-up-right (2025.12.08). Specifically withdrawn were: Staff Advisory 18-14 (2018 guidance on virtual currency derivative product listings), Staff Advisory 23-07 (2023 guidance imposing heightened scrutiny on DCO clearing of digital assets), and the 2020 actual delivery interpretive guidance for retail commodity transactions involving digital assets. See 90 Fed. Reg. ____, FR Doc. 2025-22872 (2025.12.16) (withdrawal of 2020 interpretive guidance).

Rulemaking

The CFTC's most significant rulemaking in the digital asset space was its binding interpretive guidance on "actual delivery" for retail commodity transactions, but was formally withdrawn in December 2025. That guidance dealt with an exception to the CFTC's jurisdiction vis-à-vis retail customers and came two and half years after its first proposal. CFTC, Final Interpretive Guidance, Retail Commodity Transactions Involving Certain Digital Assetsarrow-up-right, 85 Fed. Reg. 37734 (2020.06.24) (the “Guidance”). As noted above, this actual delivery interpretive guidance was formally withdrawn in December 2025 as part of Acting Chairman Pham's Crypto Sprint initiative. See Withdrawal of Outdated Guidance, supra.

Event Contracts Proposed Rule (2024) — Withdrawn (2026)

On June 10, 2024, the CFTC under Chairman Behnam issued a proposed rule that would have classified event contracts tied to sports, politics, and war as "contrary to the public interest," effectively prohibiting a large segment of federally regulated prediction markets. CFTC, Event Contractsarrow-up-right, 89 Fed. Reg. 49036 (2024.06.10). The proposed rule drew sharp criticism from Commissioner Mersinger and industry participants, and was issued amid ongoing litigation with KalshiEX LLC over political event contracts. See Event Contracts and Prediction Markets, infra.

On January 29, 2026, Chairman Michael Selig ordered staff to withdraw the 2024 proposed rule, characterizing it as "the prior administration's frolic into merit regulation with an outright prohibition on political contracts ahead of the 2024 presidential election." The CFTC also rescinded a 2025 staff advisory that had warned registrants against offering sports-related event contracts, and announced new rulemaking to establish "clear standards" for prediction markets. CFTC, Release No. 9179-26, CFTC Withdraws Event Contracts Rule Proposal and Staff Sports Event Contracts Advisoryarrow-up-right (2026.01.29).

Spot Crypto Trading on Registered Exchanges (2025)

On December 4, 2025, the CFTC announced that spot cryptocurrency products would begin trading for the first time on CFTC-registered designated contract markets (DCMs). Bitnomial Exchange, LLC launched the first leveraged spot cryptocurrency product on a CFTC-regulated exchange. This was preceded by a joint SEC-CFTC staff statement on September 2, 2025, confirming that current law does not prohibit a CFTC-registered DCM from listing and facilitating trading in certain spot crypto asset products. CFTC, Release No. 9145-25, Acting Chairman Pham Announces First-Ever Listed Spot Crypto Trading on CFTC-Registered Exchangesarrow-up-right (2025.12.04); SEC, Release No. 2025-112, Joint Staff Statement on Spot Crypto Tradingarrow-up-right (2025.09.02).

Legislative Proposals

Although the CFTC has exercised anti-fraud and anti-manipulation authority over digital asset spot markets since 2015, Congress has not yet enacted legislation granting the agency full supervisory jurisdiction over those markets. Several significant bills have been introduced since 2022, each proposing to grant the CFTC substantial new authority:

Digital Commodities Consumer Protection Act (DCCPA) (2022)

In August 2022, Senators Debbie Stabenow (D-MI), John Boozman (R-AR), Cory Booker (D-NJ), and John Thune (R-SD) introduced the Digital Commodities Consumer Protection Act of 2022arrow-up-right, S. 4760, 117th Congress. The bill would have granted the CFTC jurisdiction over spot digital commodity markets, specifically defining Bitcoin and Ether as "digital commodities," and required digital commodity platforms to register with the CFTC. The bill stalled after the FTX collapse created controversy — FTX CEO Sam Bankman-Fried had publicly supported the legislation.

Financial Innovation and Technology for the 21st Century Act (FIT21) (2024)

On May 22, 2024, the U.S. House of Representatives passed the Financial Innovation and Technology for the 21st Century Actarrow-up-right, H.R. 4763, by a vote of 279–136 — the first comprehensive crypto market structure bill to pass either chamber of Congress. The bill would grant the CFTC exclusive regulatory authority over cash and spot markets for "digital commodities," defined as digital assets whose underlying blockchain is "functional and decentralized" (meaning no person has unilateral control and no issuer or affiliate holds 20% or more of the digital asset or its voting power). FIT21 did not advance in the Senate during the 118th Congress and the Biden White House issued a statement of opposition.

CLARITY Act (2025)

In the 119th Congress, the CLARITY Actarrow-up-right, H.R. 3633, succeeded FIT21 as the House vehicle for digital asset market structure legislation. It passed the House in July 2025 and would grant the CFTC "exclusive jurisdiction" over digital commodity spot markets and require registration of digital commodity exchanges, brokers, and dealers.

On January 29, 2026, the Senate Committee on Agriculture, Nutrition, and Forestry advanced the Digital Commodity Intermediaries Act — the first crypto market structure bill to clear a Senate committee — by a 12–11 party-line vote. That bill must be reconciled with the CLARITY Act before legislation can proceed to the President's desk. As of February 2026, legislation remains pending.

Statements & Testimony

In early 2022, then-Chairman Rostin Behnam opined in public speeches and in testimony before Congress that a key role for the CFTC is to use its enforcement power to prevent fraud, deception, and manipulation perpetrated against consumers in virtual currency and digital asset markets. He remarked that since 2014 the CFTC had been "aggressive in using its limited fraud and manipulation authority in the digital asset space" by bringing "50 enforcement actions (24 of which alleged fraud)." Chairman Rostin Behnam, Keynote of Chairman Rostin Behnam at the FIA Boca 2022 International Futures Industry Conference, Boca Raton, Floridaarrow-up-right (2022.03.16).

Behnam also stressed the need for inter-agency coordination and the incomplete regulatory landscape that governs digital assets. See id. (noting he "look[s] forward to cooperating and coordinating with our fellow agencies as outlined in the Executive Order"); Testimony of Rostin Behnam, Chairman, Commodity Futures Trading Commission, Examining Digital Assets: Risks, Regulation, and Innovationarrow-up-right, U.S. Senate Committee on Agriculture, Nutrition, and Forestry (2022.02.09) (stating that he "expect[s] there will be an increasing need to ensure a coordinated federal approach in this area, and [he] plan[s] to have the CFTC be a proactive participant in this process").

In July 2022, citing what he called a "regulatory vacuum," Behnam announced the reorganization of LabCFTC as the "Office of Technology Innovation" (OTI) that would "incorporat[e] innovation and technology into [the CFTC's] regulatory oversight and mission critical functions." Chairman Rostin Behnam, Keynote Address at the Brookings Institution Webcast on The Future of Crypto Regulationarrow-up-right (2022.07.25). The office would also offer "rotational opportunities for all CFTC employees to gain exposure and expertise" to fintech innovations, including crypto. Id. Behnam further stressed in the same speech that "we are past the incubator stage, and digital assets and decentralized financial technologies have outgrown their sandboxes." Id.

Other members of the CFTC (and Behnam's predecessor) echoed his calls for both clearer regulation and robust, coordinated enforcement of DeFi markets that appear to be operating in violation of the Commodity Exchange Act:

  • “[W]e should not permit DeFi to become an unregulated shadow financial market in direct competition with regulated markets. The CFTC, together with other regulators, need to focus more attention to this growing area of concern and address regulatory violations appropriately.” Dan M. Berkovitz, Keynote Address Before FIA and SIFMA-AMG, Asset Management Derivatives Forum 2021arrow-up-right (2021.06.08).

  • “[W]e have filed more cases in parallel with the Department of Justice than ever before. . . . the CFTC filed charges against a trading platform and its CEO for unlawfully offering products margined in Bitcoin without the required anti-money laundering protections in place. We brought the civil action, and DOJ and the FBI secured an order seizing the platform’s website and shutting it down.” James McDonald, Keynote Address at the Practising Law Institute’s White Collar Crime 2019 Programarrow-up-right (2019.09.25).

  • “[C]urrent law does not provide any U.S. Federal regulator with such regulatory oversight authority over spot virtual currency platforms [absent fraud or manipulation] operating in the United States or abroad. . . . The CFTC has been in close communication with the SEC with respect to policy and jurisdictional considerations, especially in connection with recent virtual currency enforcement cases.” J. Christopher Giancarlo, Written Testimony Before the Senate Banking Committeearrow-up-right, at 4, 11 (2018.02.06).

The CFTC has also issued multiple joint statements with the SEC regarding enforcement in the digital asset and virtual currency space. Those statements also focused on the CFTC’s ongoing efforts to combat fraud, market manipulation, and evasion of AML/CFT regulations that go hand-in-hand with such schemes:

  • “Certain BSA obligations that apply to a broker-dealer in securities, mutual fund, futures commission merchant, or introducing broker, such as developing an AML Program or reporting suspicious activity, apply very broadly and without regard to whether the particular transaction at issue involves a ‘security’ or a ‘commodity’ as those terms are defined under the federal securities laws or the CEA.” CFTC, FinCEN, and SEC, Joint Statement on Activities Involving Digital Assetsarrow-up-right (2019.10.11).

  • "When market participants engage in fraud under the guise of offering digital instruments – whether characterized as virtual currencies, coins, tokens, or the like – the SEC and the CFTC will look beyond form, examine the substance of the activity and prosecute violations of the federal securities and commodities laws." CFTC, Joint Statement from CFTC and SEC Enforcement Directors Regarding Virtual Currency Enforcement Actionsarrow-up-right (2018.01.19).

Chairman Behnam's Later Testimony and Departure (2023–2025)

In the wake of the FTX collapse and subsequent CFTC enforcement actions, Chairman Behnam intensified his advocacy for congressional action. In June 2023 testimony before the House Agriculture Committee, he noted that digital asset enforcement had come to account for nearly half of the CFTC's total enforcement docket, describing the situation as "unsustainable" without explicit statutory authority and commensurate funding. Testimony of Rostin Behnam, Chairman, Commodity Futures Trading Commission, The Future of Digital Assetsarrow-up-right, U.S. House Committee on Agriculture (2023.06.06). In July 2023 testimony before the Senate Agriculture Committee, he stated that the CFTC could stand up a full regulatory framework for digital asset spot markets within 12 months of receiving congressional authority, and declared definitively that Ethereum is a commodity. Testimony of Rostin Behnam, Chairman, Commodity Futures Trading Commission, Examining Digital Assets: Legislative Proposalsarrow-up-right, U.S. Senate Committee on Agriculture, Nutrition, and Forestry (2023.07.19).

Behnam departed the CFTC on January 20, 2025, upon the change of presidential administration. During his tenure, the CFTC brought a record number of digital asset enforcement actions — including the two largest monetary judgments in agency history (FTX at $12.7 billion and Binance at $2.85 billion) — while simultaneously advocating for a comprehensive legislative framework.

Commissioner Statements on DAO and DeFi Enforcement

The CFTC's enforcement posture in the digital asset space was not without internal dissent. Commissioner Summer K. Mersinger dissented from the CFTC's enforcement action against the Ooki DAO, arguing that using enforcement to establish novel legal theories regarding DAO liability — without prior rulemaking — constituted "regulation by enforcement" and risked chilling DAO governance participation. Commissioner Summer K. Mersinger, Dissenting Statement Regarding Enforcement Action Against Ooki DAOarrow-up-right (2022.09.22). Mersinger emphasized that the Commission should have first engaged in notice-and-comment rulemaking before asserting that governance token holders are personally liable as members of an unincorporated association, rather than establishing such a consequential precedent through a default judgment.

Commissioner Kristin N. Johnson, by contrast, supported the agency's expansive enforcement posture, issuing statements endorsing the CFTC's actions against FTX, Binance, and Celsius. See Commissioner Kristin N. Johnson, Statement on FTX Consent Orderarrow-up-right (2024.08.08); Commissioner Kristin N. Johnson, Statement on Binance Settlementarrow-up-right (2023.11.21).

Acting Chairman Caroline D. Pham (2025)

Commissioner Caroline D. Pham was designated Acting Chairman of the CFTC on January 20, 2025, upon the inauguration of President Trump. CFTC, Release No. 9035-25, Commissioner Pham Designated Acting Chairmanarrow-up-right (2025.01.20). Acting Chairman Pham moved quickly to reorient the agency's approach to digital assets:

  • Enforcement Reorganization (February 2025): Pham reorganized the Division of Enforcement, eliminating the Cybersecurity and Emerging Technologies Task Force and creating a new Complex Fraud Task Force and Retail Fraud and General Enforcement Task Force. The reorganization reflected her stated goal of ending "regulation by enforcement" and refocusing enforcement resources on fraud and customer protection. She also launched a 30-day enforcement sprint seeking expedited resolution of pending compliance-focused cases that did not involve fraud or customer harm.

  • "Ending Regulation by Prosecution" (April 2025): On April 7, 2025, the Department of Justice issued a memorandum directing that the DOJ would no longer pursue enforcement actions that "superimpose regulatory frameworks on digital assets" and disbanding the National Cryptocurrency Enforcement Team (NCET). Acting Chairman Pham directed CFTC staff to comply with the policy, instructing that registration violations in digital asset cases should not be charged unless there is evidence the defendant knew of the registration requirement. CFTC, Release No. 9063-25, Acting Chairman Pham Directs Staff to Comply with Executive Orders Regarding Digital Assets Enforcementarrow-up-right (2025.04.08).

  • Crypto Sprint (August 2025): Pham launched the CFTC's "Crypto Sprint" to implement the recommendations of the Presidential Working Group on Digital Asset Markets. CFTC, Release No. 9104-25, Acting Chairman Pham Launches CFTC Crypto Sprintarrow-up-right (2025.08.01). The initiative encompassed four workstreams: listed spot crypto trading on CFTC-registered exchanges; tokenized and digital asset collateral; a digital assets pilot program; and rulemaking for technical amendments to enable blockchain-based market infrastructure. See Digital Asset Collateral and Pilot Programs, Spot Crypto Trading, supra.

Acting Chairman Pham departed the CFTC on December 22, 2025, and subsequently joined MoonPay as Chief Legal and Administrative Officer. CFTC, Release No. 9163-25, Acting Chairman Pham Announces Departurearrow-up-right (2025.12.22). During her tenure, the CFTC achieved several milestones in digital asset regulation, including the first-ever listed spot crypto trading on CFTC-registered exchanges and the launch of a digital assets pilot program.

Chairman Michael S. Selig (2025–Present)

Michael S. Selig was nominated by President Trump on October 27, 2025, confirmed by the Senate on December 18, 2025, and sworn in as the 16th Chairman of the CFTC on December 22, 2025. CFTC, Release No. 9164-25, Michael S. Selig Sworn In as 16th CFTC Chairmanarrow-up-right (2025.12.22). Chairman Selig previously served as chief counsel of the SEC's Crypto Task Force and senior advisor to SEC Chairman Paul S. Atkins, uniquely positioning him to bridge the two agencies' approaches to digital asset regulation.

In January 2026, Chairman Selig and SEC Chairman Atkins jointly announced "Project Crypto," a cooperative effort to develop a harmonized federal regulatory framework for digital assets. The initiative includes a joint token taxonomy to distinguish between securities, commodities, and hybrid instruments, as well as coordinated rulemaking on digital asset market structure. On January 29, 2026, the CFTC and SEC co-hosted the first "Project Crypto" Joint Summit, focused on building a unified approach to digital asset classification and oversight. See CFTC, CFTC and SEC Joint Event on Harmonization, U.S. Financial Leadership in the Crypto Eraarrow-up-right (2026.01.29).

On February 4, 2026, Chairman Selig announced the withdrawal of the proposed Events Contracts rule and the staff Sports Contracts Advisory, noting that "The 2024 event contracts proposal reflected the prior administration’s frolic into merit regulation with an outright prohibition on political contracts ahead of the 2024 presidential election. The Commission is withdrawing that proposal and will advance a new rulemaking grounded in a rational and coherent interpretation of the Commodity Exchange Act that promotes responsible innovation in our derivatives markets in line with Congressional intent." CFTC, Release No. 9179-26, CFTC Withdraws Event Contracts Rule Proposal and Staff Sports Event Contracts Advisoryarrow-up-right (2026.02.04).

Inter-Agency Coordination (2025–2026)

On January 23, 2025, President Trump signed an executive order titled "Strengthening American Leadership in Digital Financial Technology," which established the Presidential Working Group on Digital Asset Markets, chaired by venture capitalist David Sacks. Strengthening American Leadership in Digital Financial Technologyarrow-up-right, Executive Order (2025.01.23). The order directed the CFTC, SEC, Treasury, and other agencies to develop a unified, technology-neutral regulatory framework for digital assets within 120 days.

The Presidential Working Group issued its report on July 30, 2025, recommending that Congress grant the CFTC explicit authority over spot markets in non-security digital assets and that the SEC and CFTC immediately enable trading of digital assets at the federal level. Recommendations to Strengthen American Leadership in Digital Financial Technologyarrow-up-right, Presidential Working Group on Digital Asset Markets (2025.07.30).

On September 2, 2025, the SEC and CFTC issued a joint staff statement confirming that current law does not prohibit CFTC-registered designated contract markets from listing and facilitating trading in certain spot crypto asset products. SEC, Release No. 2025-112, Joint Staff Statement on Spot Crypto Tradingarrow-up-right (2025.09.02). That joint statement was followed by a September 29 SEC-CFTC Joint Roundtable on regulatory harmonization for digital assets — the first joint public meeting between the two agencies on this topic.

Event Contracts and Prediction Markets

The CFTC's regulation of event contracts — contracts whose payoff depends on the occurrence or non-occurrence of a future event — emerged as a significant area of digital asset-adjacent policy between 2022 and 2026. Although event contracts are not themselves digital assets, blockchain-based prediction markets (most notably Polymarket) brought the intersection of event contracts and crypto into sharp focus.

Polymarket

In January 2022, Polymarket — a blockchain-based prediction market operating on the Polygon network — settled with the CFTC for $1.4 million after the agency charged it with offering off-exchange binary options (event contracts) without registering as a designated contract market or swap execution facility. CFTC, Release No. 8478-22, CFTC Orders Event-Based Swap Markets Operator to Pay $1.4 Million Penaltyarrow-up-right (2022.01.03). Polymarket agreed to wind down its non-compliant markets and restrict access to U.S. users. The platform subsequently relocated its primary operations offshore and became the dominant prediction market platform during the 2024 U.S. presidential election cycle, handling billions of dollars in notional volume.

In December 2025, as part of the broader shift in regulatory approach under Acting Chairman Pham, the CFTC issued no-action letters to Polymarket, Gemini, PredictIt, and LedgerX regarding certain data and reporting requirements for event contracts. CFTC, Release No. 9154-25, CFTC Issues No-Action Letters for Event Contract Platformsarrow-up-right (2025.12.11).

KalshiEX LLC v. CFTC

The most consequential event contract litigation arose from KalshiEX LLC — a CFTC-registered designated contract market — which sought to list "Congressional Control Contracts," cash-settled binary contracts based on which political party would control chambers of Congress after the November 2024 elections. In September 2023, the CFTC prohibited these contracts, determining they constituted "gaming" or involved "activity that is unlawful under any Federal or State law" within the meaning of 7 U.S.C. § 7a-2(c)(5)(C)arrow-up-right.

Kalshi filed suit in the U.S. District Court for the District of Columbia. On September 12, 2024, Judge Jia M. Cobb granted summary judgment to Kalshi, holding that the CFTC "exceeded its statutory authority" in banning election contracts. The court reasoned that "gaming" refers to "the act of playing a game" or "playing games for stakes," and because elections are not games, this statutory category does not encompass election event contracts. KalshiEX LLC v. CFTCarrow-up-right, No. 1:23-cv-03257-JMC, at 16–22 (D.D.C. 2024.09.12).

The CFTC appealed to the D.C. Circuit and sought a stay pending appeal. On October 2, 2024, the D.C. Circuit denied the stay, finding the CFTC "failed to demonstrate that it or the public would suffer irreparable harm" and that its concerns about market manipulation and election integrity were "speculative and not substantiated by concrete evidence." KalshiEX LLC v. CFTCarrow-up-right, No. 24-5205, at 3–4 (D.C. Cir. 2024.10.02). On May 5, 2025, following the change in administration, the CFTC voluntarily dismissed its appeal, leaving the district court decision intact.

On January 29, 2026, Chairman Selig withdrew the 2024 proposed event contracts rule and directed staff to draft new rulemaking establishing "clear standards" for prediction markets. See Event Contracts Proposed Rule, supra.

Enforcement Actions

The vast majority of the CFTC’s enforcement actions have involved combating fraud or market manipulation in the cash or spot market for virtual currencies. This an interesting approach for the CFTC as these markets are not the ones it primarily covers; but it is also an approach for which it has clear statutory authority to protect retail consumers. See Chairman Rostin Behnam, Keynote of Chairman Rostin Behnam at the FIA Boca 2022 International Futures Industry Conference, Boca Raton, Floridaarrow-up-right (2022.03.16) (noting CFTC’s “limited fraud and manipulation authority in the digital asset space” that nevertheless led to 24 of 50 enforcement actions relating to digital assets).

The other areas the CFTC has enforced include failure to register, off-exchange transactions, price manipulation, and KYC/CIP/AML violations. In many cases multiple theories of liability are advanced at the same time. The various types of the CFTC’s many enforcement actions are categorized below.

Fraudulent Schemes

Failure to Register

Off-Exchange Transactions

Price Manipulation

KYC/CIP/AML Failures

DeFi and DAO Enforcement

The CFTC brought the first-ever enforcement action against a decentralized autonomous organization in September 2022, and the first coordinated enforcement sweep against DeFi protocol operators in September 2023.

Major Exchange and Platform Enforcement

Beginning in late 2022, the CFTC brought record-breaking enforcement actions against the world's largest cryptocurrency exchanges, including the two largest monetary judgments in agency history.

Enforcement Statistics

Digital asset enforcement became the dominant component of the CFTC's enforcement docket during this period:

  • FY 2023: 96 total enforcement actions (record year), of which 47 (49%) involved digital asset commodities — a record proportion. Total monetary penalties, restitution, and disgorgement exceeded $4.3 billion. CFTC, FY 2023 Enforcement Resultsarrow-up-right (2023.10.18).

  • FY 2024: 58 total enforcement actions. Total monetary relief of $17.1 billion — an all-time record, driven primarily by the $12.7 billion FTX judgment. Civil monetary penalties totaled $2.6 billion; disgorgement and restitution totaled $14.5 billion. Fraud accounted for 74% of crypto enforcement actions. CFTC, FY 2024 Enforcement Resultsarrow-up-right (2024.10).

  • FY 2025: Enforcement pivot under Acting Chairman Pham. Focus shifted from registration/compliance-only cases to fraud and manipulation. The 30-day enforcement sprint resolved pending compliance matters. The CFTC whistleblower program awarded over $42 million, with crypto-related tips accounting for approximately 28% of all submissions.

Litigation

Several court decisions during this period established significant new legal precedent for the CFTC's jurisdiction over digital assets.

Commodity Classification

In CFTC v. Ikkurtyarrow-up-right, the U.S. District Court for the Northern District of Illinois issued a summary judgment order that is arguably the most significant court decision on the commodity classification of digital assets to date. Judge Mary M. Rowland held that Bitcoin and Ethereum are commodities under the CEA, and — critically — extended commodity classification to the lesser-known tokens OHM and KLIMA, reasoning that these virtual currencies "fall into the same general class as Bitcoin, on which there is regulated futures trading." CFTC, Release No. 8931-24, Court Grants Summary Judgment in CFTC v. Ikkurtyarrow-up-right (2024.07). The court also rejected the argument that wrapped cryptocurrencies (e.g., wETH) should be treated differently from their underlying assets, holding the distinction "immaterial" for commodity classification purposes. The final judgment exceeded $231 million, with an additional $13.8 million contempt fine for violating the receivership order — totaling approximately $245 million. CFTC, Release No. 8959-24, Court Enters Final Judgment Ordering Over $209 Million in Ikkurty Casearrow-up-right (2024.09).

DAO Liability

In CFTC v. Ooki DAOarrow-up-right, Judge William H. Orrick of the Northern District of California entered a default judgment holding that a DAO qualifies as a "person" under the CEA because it is an unincorporated association. The court authorized alternative service of process through the DAO's online governance forum and chat box, and found that governance token holders who voted were members of the unincorporated association potentially liable for judgments against it. CFTC v. Ooki DAOarrow-up-right, No. 3:22-cv-05416-WHO (N.D. Cal. 2023.06.08).

The DAO liability theory was subsequently extended by two non-CFTC cases that are nevertheless relevant to the regulatory framework. In Sarcuni v. bZx DAOarrow-up-right, 664 F. Supp. 3d 1100 (S.D. Cal. 2023), the court went further than Ooki DAOarrow-up-right, holding that a DAO can constitute a general partnership under California law, with joint and several unlimited personal liability for all token holders. And in Samuels v. Lido DAOarrow-up-right, No. 3:23-cv-06492 (N.D. Cal. 2024), the court denied motions to dismiss, finding that the plaintiff sufficiently alleged that Lido DAO — one of the largest DeFi protocols by total value locked — is a partnership whose individual defendants may be liable as general partners.

DeFi Manipulation

The CFTC's prosecution of Avraham Eisenberg for "oracle manipulation" on the Mango Markets decentralized trading platform presented novel questions about the limits of manipulation liability in DeFi. The CFTC alleged that Eisenberg used two anonymous accounts to establish large leveraged swap positions in MNGO/USDC, then manipulated the MNGO price upward on external exchanges to inflate his position's value, enabling him to borrow over $110 million against artificially inflated collateral. CFTC, Release No. 8647-23, CFTC Charges Avraham Eisenberg with Manipulation of Mango Marketsarrow-up-right (2023.01.09).

The parallel DOJ criminal case resulted in a jury conviction in April 2024, but all criminal convictions were overturned by Judge Arun Subramanian on May 23, 2025, on the grounds that (a) venue was insufficient in the Southern District of New York because Eisenberg traded from Puerto Rico, and (b) evidence of fraud was insufficient because the Mango Markets platform had no terms of service or prohibition on the trading conduct at issue. The CFTC civil case — which has different legal standards and burden of proof — remains pending as of February 2026. The criminal reversal raises significant questions about the viability of prosecuting DeFi manipulation under existing law where no platform rules prohibit the conduct.

Commodity Pool Theory for Digital Asset Lending

Two enforcement actions established that digital asset lending and yield platforms may constitute "commodity pools" subject to CFTC registration. In CFTC v. Ehrlicharrow-up-right (Voyager Digital), the court denied the defendant's motion to dismiss, holding that the CFTC sufficiently alleged that Voyager operated as a commodity pool by pooling customer digital assets and loaning them to high-risk counterparties (including a $650 million unsecured loan to Three Arrows Capital). CFTC, Release No. 8805-23, CFTC Charges Voyager CEO with Fraudarrow-up-right (2023.10.12). The case settled in September 2025 for $750,000 in disgorgement and a three-year trading ban. CFTC, Release No. 9122-25, Court Enters Consent Order Against Former Voyager CEOarrow-up-right (2025.09). The parallel CFTC v. Celsius Networkarrow-up-right case — alleging the same commodity pool theory against the Celsius lending platform and its CEO Alexander Mashinsky — was stayed pending completion of Mashinsky's criminal proceedings and remains pending as of February 2026.

Index of Sources

Sources are listed in reverse chronological order. Not all sources appear above.

Authors

This article was originally drafted by @Lawtoshiarrow-up-right and is now being updated in conjunction with Claude Code.

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