CFTC Clears Path for Web3 Exchanges via FBOT Registration

The Commodity Futures Trading Commission (CFTC) has issued a pivotal advisory allowing offshore derivatives exchanges, including those offering crypto products, to serve U.S. participants by registering as foreign boards of trade (FBOTs). The Aug. 28, 2025, Staff Letter 25-27 clarifies that physical presence—not legal domicile—defines whether an exchange is "located in the U.S.," eliminating the need for these platforms to become designated contract markets (DCMs).

This MOVE builds on the CFTC's July 2024 amendment to Regulation 48.4, which expanded permissible intermediaries to include introducing brokers, enabling more flexible routing of U.S. customer orders through global venues. For decentralized and crypto-native platforms, the advisory marks a watershed moment, lowering structural barriers and providing a clear compliance pathway without resorting to geographic blocks or full domestic registration.

The CFTC is positioning FBOT registration as a tool to shift trading activity into transparent, regulated channels, reducing reliance on post-hoc enforcement. The agency has recently rescinded outdated crypto-specific guidance, signaling a broader shift toward integrating offshore platforms into U.S. markets under defined conditions.