On August 28, 2025, the Commodity Futures Trading Commission (CFTC) Division of Market Oversight (the Division) released Staff Advisory 25-27 (the Advisory), reaffirming the CFTC’s longstanding framework for foreign boards of trade (FBOTs).1 The FBOT framework allows certain non-U.S. exchanges already regulated by a non-U.S. regulator to provide direct access to traders in the United States by registering with the CFTC as FBOTs rather than as “designated contract markets” (DCMs).2
While the Advisory applies to all offshore derivatives exchanges, Acting Chairman Caroline Pham’s accompanying statement underscores its immediate relevance to digital asset markets. Pham described the Advisory as providing “regulatory clarity” and a “path back to U.S. markets” for digital asset platforms, many of which were “forced to set up shop in foreign jurisdictions” to reengage with U.S. participants under the FBOT framework.
Together, the Advisory and Pham’s remarks reinforce the CFTC’s increasingly constructive posture toward digital assets markets, including decentralized finance (DeFi) and Web3. By positioning FBOT registration as a channel for offshore platforms to engage with U.S. participants, the CFTC is signaling that these markets can be regulated within the FBOT framework, reducing the uncertainty that had driven much digital asset derivatives trading offshore and left it largely inaccessible to U.S. traders.
The Advisory is an important development both for offshore derivatives exchanges and for trading firms seeking to access those exchanges from the United States.
Key Takeaways
The Advisory offers several important takeaways for both exchanges and traders evaluating cross-border trading and U.S. market access.
• FBOT Registration Is the Pathway. Offshore exchanges may provide U.S. participants direct access by registering under the CFTC’s FBOT rules rather than becoming a DCM. This pathway extends beyond traditional futures exchanges to platforms offering crypto or digital asset derivatives, including DeFi and Web3, provided they can satisfy the CFTC’s FBOT rules.
• Registration Is Not Automatic. To qualify for registration as an FBOT, a foreign exchange must demonstrate compliance with the CFTC’s FBOT rules (Part 48 of the CFTC rulebook), including being subject to regulatory oversight and market integrity rules, and being regulated by a regulator that has an information-sharing arrangement with the CFTC.3
• “Located” Refers to Geographic Location. The Advisory states that whether an exchange is “foreign” or “domestic” depends on its “geographic location.” If an exchange is located outside the United States, it qualifies as “foreign” and is eligible to apply with the CFTC for registration as an FBOT framework if it satisfies the requirements of Part 48.
• Retail Limitations Remain. Retail U.S. customers remain restricted from trading swaps unless they are listed on a DCM. FBOT registration does not alter this limitation. Certain cryptocurrency derivatives that are widely traded on non-U.S. exchanges are considered to be swaps under U.S. law. FBOT registration does not provide a pathway for making those derivatives available to traders located in the United States.
• Contrast With Prior Enforcement. The Advisory underscores a different posture from recent years, standing in contrast to enforcement actions such as the May 2024 case against Falcon Labs4 and the March 2023 case against Binance,5 which targeted unregistered access to U.S. customers (both discussed in our June 2024 Blockchain Bulletin).
Sidley regularly advises clients on cross-border issues and the CFTC’s approach to extraterritorial jurisdiction. Our team is available to assess the implications for your business or to assist in pursuing tailored interpretive relief from CFTC staff.
1 CFTC Letter No. 25-27, Division of Market Oversight, Staff Advisory: Registration Framework for Foreign Boards of Trade Providing Direct Access to Members or Other Participants Located in the United States (Aug. 28, 2025), available at https://www.cftc.gov/csl/25-27/download.
2 DCMs are CFTC-regulated derivatives exchanges. DCMs are heavily regulated and include the likes of ICE Futures US, NYMEX, CME, and the Chicago Board of Trade.
3 The CFTC maintains a list of regulators with which it has information sharing and similar arrangements on its website.
4 See Order, In re Falcon Labs Ltd., CFTC No. 24-06 (May 13, 2024).
5 See Consent Order for Permanent Injunction, Civil Monetary Penalty, and Other Equitable Relief, CFTC v. Changpeng Zhao et al., No. 1:23-cv-01887 (N.D. Ill. Dec. 14, 2023).
