Quick Highlights U.S. investors can now trade on foreign crypto platforms legally. Offshore exchanges no longer face dual registration confusion. Binance.US and others can expand under new FBOT guidance. CFTC Clarifies Rules for Foreign Crypto Trading The U.S. Commodity Futures Trading Commission (CFTC) has issued guidance regarding foreign boards of trade (FBOTs), clarifying that these platforms may serve U.S. clients provided they are registered. This update aims to provide long-awaited regulatory clarity for offshore crypto exchanges and U.S. investors. Since the 1990s, U.S. investors have been permitted to trade on foreign exchanges under the FBOT registry, which applies to all asset classes, including cryptocurrency. “Today’s FBOT guidance provides the regulatory clarity needed to legalize onshore trading activity that was driven out of the United States by the unprecedented enforcement approach of recent years,” said Acting CFTC Chair Caroline Pham. Returning to the U.S. Market The previous administration’s regulatory approach forced many U.S. companies to move operations abroad. Now, these companies can return by restructuring and registering as FBOTs. This new guidance also opens the U.S. market to offshore crypto exchanges. For example, Binance cannot serve U.S. users directly but does so through Binance.US. With the updated rules, more platforms may establish compliant operations in the U.S. Simplifying Compliance for Exchanges Previously, offshore exchanges faced confusion over whether they had to register not only as FBOTs but also as designated contract markets (DCMs). The CFTC’s latest guidance clarifies that a foreign crypto exchange needs only to register as an FBOT to operate legally in the U.S. market. In 2023, the CFTC charged Binance and its former CEO, Changpeng Zhao, for promoting cryptocurrency derivatives to U.S. clients without registering as a DCM. The clarification now reduces such regulatory uncertainty and encourages responsible market participation. Part of a Global Initiative: Crypto Sprint The current guidance is part of the CFTC’s Crypto Sprint, a global initiative to shape the regulatory framework for crypto assets. By providing clear rules, the Commission hopes to encourage offshore platforms to operate safely while giving U.S. investors access to global crypto markets. With this move, the CFTC is signaling a more balanced approach to regulation, supporting innovation while protecting investors.
