Acting Commodities Futures Trading Commission Chairman Caroline Pham is pushing for the launch of leveraged spot crypto trading as soon as next month and has already held direct talks with regulated exchanges to bring the products to market.
Summary
- CFTC acting chair Caroline Pham is working with regulated exchanges to launch leveraged spot crypto trading by December.
- Trump nominee Mike Selig is set to replace Pham as permanent CFTC chair once confirmed by the Senate.
Speaking to CoinDesk, Pham said she expects the new products to “begin trading in our markets before year’s end.”
“As we continue to work with Congress on bringing legislative clarity to these markets, we are also using existing authorities to swiftly implement recommendations in the President’s Working Group on Digital Asset Markets report,” she said.
Leveraged spot crypto trading lets investors use borrowed money to boost their exposure to real cryptocurrencies like Bitcoin or Ether. Instead of speculating on future prices through contracts, they actually trade the asset itself. To do this, traders put up a fraction of the trade’s value as margin, and the rest is covered by financing from the exchange or broker.
At present, crypto traders in the U.S. can access leveraged trading through offshore platforms like Binance or OKX; however, these platforms lack the regulatory oversight and investor protections provided by federal agencies.
Instead, Pham wants to bring this activity onto regulated U.S. exchanges, which would allow investors to trade the spot asset with leverage under well-defined rules and supervision that offers institutional-grade oversight, risk management standards, and investor protections.
These products would be available on designated contract markets, or DCMs, which are federally regulated exchanges authorized to offer commodity trading to U.S. participants. Those that are already active in crypto markets are expected to move quickly to introduce leveraged spot offerings once the regulatory pathway is formalized.
Crypto-native firms that hold DCM status include Coinbase Derivatives and Bitnomial, while other approved venues, such as CME and Cboe Futures Exchange, may also participate in rolling out these products.
“I’m excited about new products,” Pham said, adding that she is working to ensure “a smooth transition for President Trump’s nominee for the permanent CFTC chairman.”
Trump has nominated Mike Selig, a senior SEC official and key architect of its Crypto Task Force, as the next permanent chairman of the CFTC, who will replace Pham once the Senate confirms his appointment.
With limited time left in her interim role, Pham has fast-tracked several major policy efforts instead of waiting for Congress to pass new legislation granting the agency more authority over crypto spot markets.
Pham is bypassing this legislative delay by relying on existing regulations like the Commodity Exchange Act, which require all retail commodity transactions involving leverage, margin, or financing to take place on federally regulated exchanges.
CFTC pushes for crypto adoption
Pham, with the political tailwind of a crypto-forward administration, has wasted no time in advancing initiatives that bring regulatory clarity for digital assets.
Earlier this year, the CFTC issued guidance that opened the door for spot crypto contracts to trade on federally registered exchanges, laying the foundation for regulated platforms to offer real-asset crypto products with enhanced transparency and compliance.
More recently, in September, the CFTC and the SEC released joint guidance clarifying that exchanges registered with either agency are not prohibited from facilitating trading in certain spot commodity products, including cryptocurrencies.
“The United States has long been the home of financial innovation, but recently, novel products have been driven overseas by fragmented oversight and legal uncertainty. The SEC and the CFTC should encourage the reversal of this trend,” an excerpt from the joint statement said.
