US crypto regulations are becoming clearer.
Author: ChandlerZ, Foresight News
On December 4, Caroline D. Pham, acting chair of the U.S. Commodity Futures Trading Commission (CFTC), announced that listed cryptocurrency spot products will begin trading for the first time on a CFTC-registered futures exchange under federal regulation in the United States.
This move is one of the first agenda items in the "Crypto Sprint" initiative launched to implement the government's pro-crypto policy objectives. Other components of the initiative include enabling tokenized collateral (including stablecoins) in the derivatives market and developing rules to technically amend CFTC regulations on collateral, margin, clearing, settlement, reporting, and record keeping to support the use of blockchain technology and market infrastructure (including tokenization) in the market.
Bitnomial will launch the first CFTC-regulated spot cryptocurrency market.
Back in December 2023, the U.S. CFTC approved Bitnomial, a Bitcoin futures platform, to register as a derivatives clearing organization in the United States, allowing it to settle margin futures and options contracts. Bitnomial has been authorized to operate as a designated contract market, allowing it to list futures and options contracts, and as a futures commission broker, it is permitted to trade with its clients.
In October 2024, Bitnomial also sued the U.S. Securities and Exchange Commission (SEC), accusing it of excessively expanding its jurisdiction over digital assets. The case involved XRP futures contracts, which were already regulated by the CFTC. In its lawsuit, Bitnomial stated that futures fell under the jurisdiction of the Commodity Futures Trading Commission (CFTC), and that the SEC's involvement would significantly increase the company's regulatory burden.
In November, Caroline Pham confirmed that she had been in talks with several CFTC-regulated Designated Contract Markets (DCMs). The list includes CME, Cboe Futures Exchange, ICE Futures Exchange, crypto-native platform Coinbase Derivatives, prediction market Kalshi, and Polymarket US. Discussions involve launching crypto spot trading products with margin, leverage, and funding capabilities.
In an interview, he stated, "While we continue to work with Congress to bring legislative clarity to these markets, we are also using our existing powers to rapidly implement the recommendations in the President's Working Group on Digital Asset Markets Report."
Caroline Pham's regulatory approach: from adjusting enforcement strategies to building communication mechanisms
Driven by this regulatory shift is the regulatory approach spearheaded by Caroline Pham over the past year. After assuming acting chair at the beginning of the year, she quickly adjusted the CFTC's enforcement strategy in the crypto space. In previous years, regulators had consistently faced the problem of fragmented resources, with too much effort being spent on repeated battles with compliant platforms. Caroline emphasized refocusing on core illegal activities such as market fraud and manipulation, and initiated a series of reforms to establish a clear development path for compliant projects.
At the policy level, the CFTC's "Crypto Sprint" program serves as the implementation framework. This program covers everything from listing spot contracts to the inclusion of tokenized collateral in the derivatives clearing system, and a series of technical revisions surrounding margin, clearing, settlement, and reporting, aiming to establish a clearer federal regulatory framework for crypto assets, especially non-security digital assets.
The core of this plan is to promote compliant trading of spot crypto assets on CFTC-registered futures exchanges (DCMs) and fill long-standing regulatory gaps in areas such as market structure, custody, stablecoin regulation, and anti-money laundering standards. By incorporating crypto trading involving leverage, margin, or financing into the existing commodity trading regulatory framework, the CFTC aims to improve trading transparency, reduce reliance on unlicensed or offshore platforms, and thus address the long-standing regulatory gray area of the US cryptocurrency spot market.
To further strengthen communication between regulators and industry, Pham proposed the establishment of a "CEO Innovation Committee" in November, opening a nomination channel for CEOs of companies in the technology, finance, and crypto sectors. The committee aims to provide expert input to the CFTC in expanding its regulatory capabilities for digital assets and refining rules for emerging sectors such as prediction markets, while also establishing a stable communication channel between institutions and regulators. Previously, a major complaint from the crypto industry regarding US regulation was the lack of interaction between policymakers and frontline participants. The emergence of this structure indicates that regulation is moving from one-way enforcement to two-way collaboration, providing a new platform for discussion on future regulatory refinements.
The prototype of the new CFTC market map
Following the approval of spot trading, the CFTC's regulatory path has gradually taken shape in two pilot markets. One is Bitnomial, which serves as a compliant spot market. Under the DCM framework, spot, futures, and options can operate within a unified trading and clearing system, making it easier for traditional financial institutions to access digital assets.
On the other end is the prediction market platform Polymarket. In November, the CFTC approved its amended designation order, allowing it to enter the US market through intermediaries, provided it meets stricter monitoring systems, clearing procedures, and regulatory reporting requirements. Polymarket stated that it has developed more robust monitoring systems, market regulatory policies, clearing procedures, and Part 16 regulatory reporting capabilities. Polymarket will implement other rules, policies, and processes applicable to intermediary transactions before its official launch.
According to Bloomberg, Gemini, the crypto exchage founded by Tyler and Cameron Winklevoss, is planning to launch prediction market contracts, entering the prediction market arena. Gemini applied to the U.S. Commodity Futures Trading Commission (CFTC) in May to establish a Designated Contract Market (DCM) and is considering listing prediction-based derivative contracts on the platform. The application is currently under review.
Bitnomial and Polymarket represent the CFTC's different visions for the spot market and innovative contracts, respectively. Together, they form the prototype of the digital goods market envisioned by the regulator, enabling spot, derivatives, and prediction products to develop in a coordinated manner within a unified framework.
In a previous statement, Caroline also indicated that the CFTC is exploring the possibility of recognizing overseas cryptocurrency exchanges that adhere to sound, cryptocurrency-specific rules (such as the EU's MiCA framework) within the US cross-border regulatory framework. This statement follows the CFTC's recent reaffirmation of its long-standing Foreign Trading Commission (FBOT) framework. This framework allows certain non-US cryptocurrency exchanges already regulated by foreign regulators to provide direct trading access to US traders by registering with the CFTC as an FBOT, rather than a Designated Contract Market (DCM).
The CFTC is close to becoming the "primary regulator" of spot digital goods.
The policy environment in 2025 made the CFTC's position increasingly clear. In September, the US SEC and CFTC issued a joint statement clarifying that exchanges registered with the SEC and CFTC are not prohibited from offering trading in certain spot crypto asset products. This was to further advance the SEC's "Project Crypto" and the CFTC's "Crypto Sprint" initiatives, and to discuss perpetual contracts, 24-hour markets, event contracts, and exemptions for DeFi innovation.
Meanwhile, Congress is debating legislation to delineate the functions of the SEC and CFTC, placing security tokens under the SEC and digital commodities and their spot and derivatives trading under the CFTC. The two are collaborating to reduce overlapping regulations and regulatory gaps, pushing for a more unified federal regulatory framework. This plan is currently being refined through public consultation and phased implementation, focusing on establishing an enforceable rule system for digital assets rather than promoting the development of specific industries.
Therefore, Michael Selig, Trump's nominee for CFTC chairman, has attracted much attention. Michael Selig comes from the SEC's Crypto Task Force and was the chief advisor of the SEC's Crypto Task Force. He was also a partner in the asset management practice of the law firm Willkie Farr & Gallagher. He is extremely familiar with the gray areas at the boundary between securities and commodities. Now he is turning to lead the CFTC, which is seen as his intention to further upgrade the temporary policy arrangements into a long-term regulatory design based on the existing achievements of the "crypto sprint".
The U.S. Senate Agriculture Committee approved Michael Selig's nomination by a vote of 12 to 11 and will send it to the full Senate for a vote. Whether it's a complete takeover of the spot market or the delineation of responsibilities with the SEC, the new chairman is likely to be a key figure in the future restructuring of the U.S. cryptocurrency market's regulation.
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