US regulators clarify rules for spot trading of cryptocurrencies

Key points:

• Exchanges registered with the SEC and CFTC are not prohibited from facilitating trading in certain spot crypto assets.
• This initiative is part of Project Crypto and Crypto Sprint.

The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have clarified that current legislation does not prevent registered companies in the US from listing and facilitating trading in certain spot crypto assets.

These include CFTC-registered designated contract markets (DCMs), foreign board of trade (FBOTs), and SEC-registered national securities exchanges (NSEs).

SEC Chairman Paul Atkins noted:

“Market participants should have the freedom to choose where they trade spot crypto assets. The SEC is committed to working with the CFTC to ensure that our regulatory frameworks support innovation and competition in these rapidly evolving markets.”

CFTC Acting Chair Caroline D. Pham added:

“Under the prior administration, our agencies sent mixed signals <…> That chapter is over. By working together, we can empower American innovation in these markets and <...> making America the crypto capital of the world..”

What does the statement mean for spot trading?

This initiative is part of the SEC’s Project Crypto and the CFTC’s Crypto Sprint program, which are based on the report of the President’s Working Group on Digital Asset Markets.

Regulators emphasized that this is not just about “allowing” trading, but about creating a full-fledged infrastructure:

• Margin, clearing, and settlement: clearing houses and custodians are allowed to cooperate in maintaining client accounts.

• Public dissemination of data: information on transactions on NSEs and DCMs must be made available to ensure transparency and access to data for all participants.

• Principles of a fair and orderly market: regulators expect that the execution of transactions will be organized in a way that promotes competition and a level playing field for all participants.

This statement applies to registered national securities exchanges (NSEs), designated contract markets (DCMs), and foreign board of trade (FBOTs). Existing crypto exchanges such as Coinbase, Kraken, and Gemini allow spot trading of assets. They are not national securities exchanges or fixed capital markets, so they do not fall under the same federal market structure as large traditional US exchanges such as Nasdaq or the New York Stock Exchange (NYSE).