CFTC Could Authorize International Cryptocurrency Exchanges to Operate Under U.S. Regulations — Implications for Traders

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

During her address to the UK Parliament’s All-Party Parliamentary Group on Blockchain Technologies, Pham detailed a cross-border framework that could enhance market access for American traders and bring offshore activities back under U.S. regulation.

This announcement follows closely on the heels of the CFTC’s advisory issued a week prior, which permitted foreign boards of trade to provide U.S. traders with direct market access.

CFTC plans to permit spot crypto trading on regulated futures exchanges, furthering efforts to implement U.S. digital asset policy. #CFTC #SpotCrypto https://t.co/g0mdpetrnJ

— Cryptonews.com (@cryptonews) August 5, 2025

This strategy would build upon the CFTC’s established framework for foreign boards of trade, known as FBOTs, which has been operational since the 1990s. Under this framework, international exchanges can cater to U.S. customers if their home jurisdictions adhere to comparable regulatory standards.

Granting recognition to qualified foreign platforms would signify a significant extension of the CFTC’s cross-border influence.

Pham contended that this strategy could help mitigate the migration of U.S. crypto trading activities to offshore exchanges and instead bring those markets under a regulatory framework that aligns with American regulations. She characterized the framework as the most feasible method to repatriate trading volume without awaiting protracted legislative changes or new bilateral agreements.

CFTC Considers Global Crypto Alignment as Pham Encourages U.S. to Reintegrate Firms

In her remarks, Acting Chairman Caroline D. Pham highlighted that numerous American crypto firms have relocated operations overseas in recent years, attributing this trend to the absence of clear regulations in the United States. Jurisdictions in Europe, Asia, and the Middle East have established digital asset frameworks that attracted companies away. She emphasized that the U.S. can no longer postpone welcoming platforms that wish to invest, hire, and develop within the country.

This appeal follows the President’s Working Group on Digital Asset Markets report, which outlines a vision for what officials have termed a “Golden Age of Crypto.”

The report calls on Washington to modernize banking oversight, bolster the dollar’s position in global finance, enforce stringent taxation, and combat illicit activities, all while empowering the SEC and CFTC to utilize existing authorities to authorize digital asset trading under clear federal standards.

This would imply that regulations concerning custody, registration, trading, and recordkeeping would be streamlined for firms aiming to enter the U.S. market.

Pham further indicated that the CFTC will evaluate whether platforms authorized under the European Union’s Markets in Financial Instruments Directive (MiFID) or the Markets in Crypto-Assets Regulation (MiCA) qualify for access. Other jurisdictions with equivalent regulatory frameworks could also be acknowledged.

@cryptocom has obtained a MiFID license following the acquisition of A.N. Allnew Investments, broadening regulated crypto derivatives offerings throughout Europe. #Crypto #MiFIDII https://t.co/v2s0xHLWnD

— Cryptonews.com (@cryptonews) May 21, 2025

Prominent exchanges such as Kraken, KuCoin, Coinbase, OKX, Crypto.com, and Gemini have already sought MiFID and MiCA approvals, extending their presence across Europe under these frameworks.

According to Pham, these frameworks already encompass requirements regarding capital, risk management, custody, and retail protections. Aligning them with U.S. regulations would help prevent market fragmentation and enhance global coordination.

CFTC and SEC Accelerate “Crypto Sprint” as Global Scrutiny of Offshore Exchanges Grows

The CFTC and Securities and Exchange Commission (SEC) are intensifying efforts to clarify U.S. digital asset markets through a collaborative “Crypto Sprint” initiative.

The SEC has initiated “Project Crypto,” while the CFTC has commenced consultations on trading regulations, with both agencies striving to harmonize product definitions, reporting requirements, and capital obligations.

The US CFTC has launched its next ‘Crypto Sprint,’ a four-phased rulemaking agenda, this time focusing on stakeholder engagement. #CFTC #CryptoSprint #ProjectCrypto https://t.co/aXUwAe0pQn

— Cryptonews.com (@cryptonews) August 22, 2025

This initiative reflects a growing trend to integrate crypto markets under existing U.S. securities and futures regulations. Just last week, the SEC and CFTC jointly confirmed that registered exchanges are allowed to list and trade certain spot digital assets, effectively incorporating them into established investor protections and compliance standards.

A joint SEC-CFTC roundtable is scheduled for September 29 to discuss regulatory alignment, including the role of decentralized finance. Last week, U.S. senators amended the Responsible Financial Innovation Act of 2025 to clarify SEC and CFTC responsibilities and enhance protections for DeFi and emerging blockchain sectors.

In addition, the agencies recently released a joint staff statement clarifying that current U.S. law permits registered exchanges to facilitate specific spot crypto trades.

Moreover, the CFTC has initiated a public consultation regarding listed spot crypto trading and other proposals from the President’s Working Group on Digital Asset Markets.

The U.S. policy initiative coincides with a global increase in scrutiny of offshore exchanges. Bybit has resumed its trading application in India after paying a fine of 9.27 crore rupees ($1.06 million) for breaching anti-money laundering regulations.

@Bybit_Official resumes full crypto trading access in India after fulfilling compliance requirements. #crypto #India https://t.co/bgTQu7QrM4

— Cryptonews.com (@cryptonews) September 8, 2025

Simultaneously, South Korea’s Financial Intelligence Unit (FIU) is investigating unregistered overseas crypto exchanges, including BitMEX, KuCoin, CoinW, Bitunix, and KCEX, for targeting local users without VASP registration.

In 2023, Taiwan’s Financial Supervisory Commission (FSC) planned to impose restrictions on offshore crypto exchanges unless they register locally, aiming to enhance disclosure, establish listing standards, and ensure proper custody of client assets.

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