The US Congress has long sought to give the Commodity Futures Trading Commission more direct authority over crypto spot markets, but the agency is moving forward without it, and interim chief Caroline Pham is in talks with regulated exchanges to launch spot crypto products as soon as next month, according to people with direct knowledge of the plans.
Even during the federal government shutdown that is otherwise delaying crypto policy efforts in Washington, the people said Acting Chairman Pham has met personally with several financial platforms interested in listing spot crypto contracts. The CFTC is also weighing some additional guidance on how to make that trade, they said, building on Pham’s public position that the agency has ample legal authority to approach the markets in this way.
Pham — who will ultimately be replaced by President Donald Trump’s new nominee, SEC crypto official Mike Selig — is busy overhauling the CFTC’s internal structure and its enforcement division, and she’s also moving toward a tokenized collateral policy expected to emerge early next year. But the most immediate policy area the agency is pushing is overseeing the new retail spot products on regulated platforms, done in the absence of an act from Congress.
“As we continue to work with Congress to bring regulatory clarity to these markets, we are also using existing authorities to quickly implement recommendations in the President’s Task Force on Digital Asset Markets report,” Pham said in a statement to CoinDesk. “I am excited about new products that we expect to begin trading in our markets before the end of the year, and I am working to ensure a smooth transition for President Trump’s nominee for permanent CFTC chairman.”
Spot commodity trading — the immediate trading of actual assets rather than futures, in this case including transactions in digital assets in such tokens as bitcoin and Ethereum’s ether — has been a major regulatory issue at the center of the industry’s political lobbying in Washington. Many lawmakers and Pham’s Democratic predecessor at the top of the agency have argued that Congress needs to give the CFTC oversight powers there. If Pham ushers in CFTC-regulated exchanges against leveraged trading in such assets as bitcoin and ether, she has potentially vaulted over some of that legal hurdle and could give institutional investors more incentive to look at crypto.
“By being able to access such crypto products in a regulated venue that is subject to well-known protections, these institutions and other sophisticated market participants may be more willing to gain or increase their crypto exposure because it is available in a venue that has regulated protections that they are used to,” said Kris Swiatek, an attorney at Seward & Kissel, which advises on digital asset managers, in an interview with asset managers.
Exploited spot crypto
The crypto-commodity trades – involving margin, leverage or financing – will take place on so-called Designated Contract Markets (DCMs) under the full, traditional regulation of commodity law, potentially giving investors and their advisers the added security. The limited trading window still leaves plenty of territory for the eventual US market structure legislation to further define the crypto spot world and its inner workings.
Although a spokesman for the agency declined to identify the exchanges that may take the lead, people familiar with the talks say the DCMs already immersed in crypto are expected to be the fastest to market. Some crypto-native companies such as Coinbase and Bitnomial have DCM status, as do prediction market platforms including Kalshi and Polymarket.
“The recent work by the CFTC on spot market regulation is particularly encouraging,” said Cody Carbone, executive director of the Digital Chamber, which pushes for friendly crypto policy in Washington. “Because market structure depends in many ways on Congress reopening the government, agencies governed by the president’s executive order and task force recommendations must step up.”
The better-known US Securities and Exchange Commission has attracted the majority of crypto attention in recent years due to that regulator’s past aggressive opposition to the industry’s business practices and legal stance, but its smaller CFTC cousin likely has jurisdiction over the vast majority of digital asset token transactions. Even the pro-crypto SEC chairman appointed by President Donald Trump, Paul Atkins, suggests that the clear majority of assets in the sector are not securities and effectively beyond his agency’s reach. That leaves a large chunk of crypto in the hands of the CFTC.
However, the SEC and CFTC leaders recently came forward to say they are tackling the new product offerings jointly, instructing the exchanges they regulate that certain spot trading of crypto commodities is fair game if done properly and in consultation with regulators. Because Pham is exempt from current restrictions on federal worker activity, she has been able to take meetings and mentor the private sector companies directly, the people said.
Andreessen Horowitz (a16z), a leading investor in crypto projects, told the CFTC in a recent comment letter that the agency’s public guidance “represents a crucial opportunity to reverse this offshoring trend by providing U.S. retail investors access to leveraged spot crypto products within a comprehensive regulatory framework that maintains the high standards of market integrity for U.S. and derivatives investors.”
Stablecoin security
The regulator’s other near-term policy shift, which would allow the use of stablecoins among permitted tokenized collateral in the huge derivatives market, was due to get a final stamp in the second quarter of next year, according to people familiar with the work. They said it is likely to begin as a pilot program at U.S. clearinghouses — with stricter oversight, with extra disclosure of such items as position sizes, large traders and volume, plus more reporting on operational incidents.
Pham, who had long worked on the idea of tokenized collateral, has called this a “killer app” for stablecoins.
When she took over at the beginning of the year, Pham was among the heads of federal agencies that saw Elon Musk’s Department of Government Efficiency (DOGE) cut large swaths of government workers. She also made her own far-reaching personnel decisions, canceled certain expensive service contracts, and started political initiatives — such as her so-called “crypto sprint” — with no apparent hesitation about her temporary status. The crypto effort sought to speed up digital asset policies and meet Trump’s expressed demands. Pham’s ongoing restructuring of the agency’s inner workings has included a revamp of the enforcement division, which had been heavily focused on crypto cases in recent years.
Although the overhaul of the agency inside and out has ruffled some feathers, and scores of longtime employees are headed for the exits under the Trump administration’s buyout offer for federal workers, the depleted staffing leaves room to recreate key functions at the CFTC. On enforcement, Pham’s goal is to set up a dedicated unit of about eight or nine trial lawyers, potentially hiring former prosecutors from places like the Justice Department to bring more courtroom experience to the CFTC, the people said.
The agency has been particularly interested in stretching its budget by potentially hiring legal staff in less expensive parts of the country, such as Kansas City.
Pham had discussed her own departure plan with the administration in recent months, agreeing to stay on until a chairman is confirmed to replace her. That term has been extended after the president’s first pick of former commissioner Brian Quintenz withdrew amid a public spat with Gemini CEO Tyler Winklevoss, and the Senate continues to grapple with government shutdown negotiations that could further delay its confirmation efforts.
Sources close to MoonPay, a US-based provider of crypto infrastructure services, said Pham has planned to join the company as chief legal officer and CEO when she leaves the agency, which would see her follow in the footsteps of other former CFTC commissioners entering the digital space. A former Republican commissioner during Pham’s tenure, Summer Mersinger, recently left to lead the Blockchain Association as executive director; Quintenz has run policy work at a16z Crypto; and former chairman J. Christopher Giancarlo is on the Digital Chamber’s board of directors and wrote a book styling himself “CryptoDad.”
It’s unclear when the Senate will be able to vote to confirm Selig, an SEC official who Carbone said has “worked to shape sound digital asset policy in the public and private sectors for years.” Pham may be around to implement a few more changes at the agency.
Amid leadership uncertainty, she struggled in some hiring negotiations early this year, but she is pushing ahead with trying to recruit people with decades of experience in the financial sector — generally at the level of running their corporate divisions — to take leadership roles at the CFTC, the people said.
Solo commissioner
As for the direct work of the commission, she is in the very unusual position of being a single member of what is supposed to be a five-commissioner agency. This effectively puts her in a role similar to agencies with a single director, such as the Consumer Financial Protection Bureau or the Office of the Controller of the Currency. But crypto lobbyists and lawyers have quietly expressed uncertainty about the legal force of policy decisions made by a solo Republican president, as the Trump administration deliberately seeks to empty federal agencies of opposition party input required by federal law.
The only formal crypto rulemaking currently underway at the CFTC is an effort to amend the agency’s rules to make room for the inclusion of blockchain technology — a technical effort that spans a number of rules across the agency’s jurisdiction.
“In the first few months of this administration, we have focused on getting back to basics at the CFTC, streamlining operations and preparing for expanded oversight in the digital asset space,” Pham said, and that has been welcomed by crypto firms.
“We have been very pleased with the degree to which she has initiated critical work streams,” said Faryar Shirzad, Coinbase’s Chief Policy Officer, in an interview with CoinDesk. He said Pham has been “really open to companies like ours to be able to provide input to the agency’s work.”
She and Selig have been in contact during his preparations for the confirmation process, the people said. Selig — if confirmed by the Senate — is largely expected to continue in the same vein of crypto-friendly policy because he has been a leading staffer on the SEC’s own Project Crypto, working in coordination with the CFTC.
The industry’s hopes have long been tied to the concept of big investment dollars waiting on the sidelines until the field matures and is safely regulated. A wave of government aid in the past year has helped it along, but observers of the CFTC’s spot trading initiative suggest it could provide another big confidence boost.
“There’s been a lot of talk about this, generally from traditional players,” Swiatek said.
He predicted “a lot of potential movement there,” because, he said, “everyone is ultimately competing for a piece of this growing ecosystem.”
