CFTC Crowns Itself Regulator of Spot Crypto Markets

The Commodity Futures Trading Commission (CFTC) has granted itself novel oversight of spot crypto markets in the United States. Commissioner Caroline D. Pham positioned the announcement as a historic milestone that will aid in protecting American investors.

What's the Scoop?

• Novel Authority: In a December 4 press release, the CFTC announced that spot cryptocurrency products can begin trading for the first time in U.S. federally regulated markets on CFTC registered futures exchanges.
• Golden Age: According to the CFTC, the move "marks a significant step forward in the Trump Administration’s pledge to usher in a Golden Age of Innovation and make America the 'crypto capital of the world.'"
• Early Entrants: Bitnomial, a CFTC-regulated designated contract market, is slated to become the first exchange to offer spot crypto products. According to the exchange, its customers can expect to receive leveraged spot trading access sometime next week.

What's the Take?

While this unexpected development appears alarmingly similar to regulatory overreach (the CFTC is tasked with regulating commodity futures markets, not commodity spot markets), the announcement has been well received by the crypto industry, which seemingly views it as further evidence of D.C.'s digital asset embrace.

Although encouraging to have bettered access to crypto products through regulated exchanges, the prospect that the CFTC can use its newfound regulatory oversight for evil remains a foremost concern. If the CFTC does not regulate spot gold markets, why should it have any say over who can offer spot bitcoin markets?