1.  As used herein, the term “crypto asset” means any digital representation of value that is recorded on a cryptographically-secured distributed ledger. Any crypto asset, other than a “payment stablecoin” issued by a “permitted payment stablecoin issuer,” as such terms are defined in section 2 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, Public Law 119-27, 139 Stat. 419 (2025) (“GENIUS Act”), could meet the definition of “commodity” under the Act. See CEA 1a(9), 7 U.S.C. 1a(9), as amended by GENIUS Act section 17(f); 12 U.S.C. 5901(22). Although not included in the statutory exclusion from the definition of “commodity” in section 17 of the GENIUS Act, payment stablecoins issued by a “foreign payment stablecoin issuer” (as the term is defined in the GENIUS Act) registered with the Office of the Comptroller of the Currency will generally not meet the definition of “commodity” under the Act. See 12 U.S.C. 5901(12). The term “distributed ledger” generally refers to databases that maintain information across a network of computers in a decentralized or distributed manner. These networks commonly use cryptographic protocols to ensure data integrity and consensus mechanisms to ensure data congruity. Blockchains are one type of distributed ledger, and they are often used to issue and transfer ownership of crypto assets. Further, for purposes of this release, “onchain” refers to transactions or data that are processed and recorded directly on a blockchain or similar system and “offchain” refers to transactions or data that are processed and recorded outside of a blockchain or similar system. See Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets,91 FR 13714, 13715 n. 1 (Mar. 23, 2026) (“Joint Crypto Asset Taxonomy”).

2.  CEA 3(a)-(b), 7 U.S.C. 5(a)-(b); see also Philip McBride Johnson, Thomas Lee Hazen, Susan C. Ervin, Charles R. Mills & Kathryn M. Trkla, Derivatives Regulation § 2.07 (2d Ed.) (“Johnson et al.”) (“The CEA has a bountiful history—a statute at the intersection of financial history and public policy, at ground zero of financial innovation.”).

3.  CEA 2(a)(1)(A), 7 U.S.C. 2(a)(1)(A).

4.  CEA 3(a), 7 U.S.C. 5(a).

5.  CEA 3(a)-(b), 7 U.S.C. 5(a)-(b).

6.   Id.

7.  CEA 2(a)(1)(A), 7 U.S.C. 2(a)(1)(A). See also Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 355-356 (1982) (stating that the Act “has been aptly characterized as `a comprehensive regulatory structure'”) (quoting H.R. Rep. No. 93-975, at 1 (1974)).

8.   Review of Commodity Exchange Act and Discussion of Possible Changes: Hearings Before the H. Comm. on Agriculture, 93d Cong. 121 (1973).

9.  The Act “is one of two primary U.S. federal statutes that regulate how financial markets operate. The other, administered by the Securities and Exchange Commission (“SEC”), is the Securities Exchange Act of 1934 (“Exchange Act”).” See Johnson et al., § 6.01. The year following the passage of the Commodity Futures Trading Commission Act in 1974 and its establishment of the CFTC to oversee a uniform national regulatory framework under the Act, the 94th Congress demonstrated a continued focus on the importance of uniform national rules that implement federal market regulation by enacting the 1975 Securities Act Amendments (the “'75 Amendments”) to the Securities Act of 1933 (“Securities Act”) and the Exchange Act. The impetus for the '75 Amendments resembled that which led to the Commodity Futures Trading Commission Act. Just as the Commodity Futures Trading Commission Act provided for a comprehensive regulatory structure to oversee the national public interest in the commodity derivatives markets, the '75 Amendments “specifically endorsed the development of a national market system.” See Regulation of Exchanges,62 FR 30485, 30492 (June 4, 1997) (emphasis added). Decades later, the SEC relied in part on the Congressional findings of the '75 Amendments, including that “[t]he securities markets are an important national asset which must be preserved and strengthened,” as well as the broad discretionary exemptive authority in Section 36 of the Exchange Act that resembles that of CEA 4(c), to adopt a regulatory framework for alternative trading systems. See Regulation of Exchanges and Alternative Trading Systems,63 FR 70844, 70845-46 & nn.6-7 (Dec. 22, 1998) (emphasis added).

10.   Board of Trade of City of Chicago v. Olsen, 262 U.S. 1, 41 (1923). See also Johnson et al., § 2.03 (“The 1974 legislation was a major turning point in U.S. derivatives regulation. The Commodity Futures Trading Commission Act of 1974 greatly expanded the CEA's reach, strengthened the authority and importance of the law's administrator by creating the [Commission] as an independent federal agency, and established a comprehensive framework for regulating the markets.”). Congress has repeatedly affirmed its intention to centralize the oversight and regulation of the transactions subject to the Act. The first federal legislation designed to create a comprehensive federal regulatory framework for futures markets was the Future Trading Act of 1921, Public Law 67-66, 42 Stat. 187 (1921), followed by the Grain Futures Act of 1922, Public Law 67-331, 42 Stat. 998 (1922). In passing these laws, Congress recognized the importance of uniform federal regulation of futures markets, despite concerns by some members of Congress who objected to the proposed law because it would interfere with state police powers. H.R. Rep. No. 67-1095, at 5 (1922). When Congress expanded federal oversight of futures markets by adopting the CEA in 1936, Public Law 74-675, 49 Stat. 1491 (1936), the boundary between federal and state authority remained unsettled as futures markets expanded beyond their agricultural origins. Market participants continued to face the persistent threat of state prosecution through a patchwork of state laws and regulations. Congress responded to this uncertainty with the passage of the Commodity Futures Trading Commission Act in 1974. Public Law 93-463, 88 Stat. 1389 (1974). Amendments to the CEA between 1978 and 2010 repeatedly reinforced and clarified the CFTC's exclusive jurisdiction over the operation of markets involving commodity derivatives. For example, the Futures Trading Act of 1982, Public Law 97-444, 96 Stat. 2294 (1983), further clarified the scope of the CEA's preemption of other federal and state laws and the role of the states in pursuing illegal or fraudulent off-exchange transactions, while still recognizing “the CFTC['s] exclusive jurisdiction to regulate futures trading and enforce the provisions of the Act, thereby preempting any State regulatory laws.” H.R. Rep. No. 97-565, at 44-45 & 102-03 (1982), reprinted in 1982 U.S.C.C.A.N. 3871, 3893-94 & 3951-52.

11.   See Dodd-Frank Act, Public Law 111-203, 124 Stat. 1376 (2010).

12.  CEA 2(c)(2)(D)(iii), 7 U.S.C. 2(c)(2)(D)(iii). A “2(c)(2)(D) transaction” is, unless an exception applies, “any agreement, contract, or transaction in any commodity that is—(I) entered into with, or offered to (even if not entered into with), a person that is not an eligible contract participant or eligible commercial entity; and (II) entered into, or offered (even if not entered into), on a leveraged or margined basis, or financed by the offeror, the counterparty, or a person acting in concert with the offeror or counterparty on a similar basis.” CEA 2(c)(2)(D)(i), 7 U.S.C. 2(c)(2)(D)(i).

13.  CEA 3(a), 7 U.S.C. 5(a).

14.  CEA 2(c)(2)(D)(iii), 7 U.S.C. 2(c)(2)(D)(iii); see also CEA 4(a), 7 U.S.C. 6(a).

15.   Id.

16.  President's Working Group on Digital Asset Markets, Strengthening American Leadership in Digital Financial Technology, at 16 (July 30, 2025) (“President's Working Group's Report”), available at www.whitehouse.gov/​crypto/​.

17.   See, e.g., Press Release, U.S. Att'y's Off. for the S.D.N.Y., Samuel Bankman-Fried Sentenced To 25 Years In Prison (Mar. 28, 2024), available at www.justice.gov/​usao-sdny/​pr/​samuel-bankman-fried-sentenced-25-years-prison (describing how Samuel Bankman-Fried “orchestrated one of the largest financial frauds in history, stealing over $8 billion of his customers' money [. . .] The scale of his crimes is measured not just by the amount of money that was stolen, but by the extraordinary harm caused to victims, who in some cases had their life savings wiped out overnight.”); Section II.C.1, infra, for a further discussion around significant customer protection issues in crypto asset markets; CFTC v. HDR Glob. Trading Ltd., No. 1:20-cv-08132, ECF No. 1 at 13 (S.D.N.Y. Oct. 1, 2020) (“BitMEX”) (“ BitMEX allows customers to place buy or sell orders for its various [crypto asset] derivatives with leverage of up to 100 to 1, meaning a customer with $10,000 in his or her account may execute a trade with a notional value of $1,000,000.”).

18.   American Agric. Movement v. Board of Trade of City of Chicago, 977 F.2d 1147, 1156 (7th Cir. 1992).

19.   See, e.g., Letter from Crypto Council for Innovation (“CCI”) to Christopher J. Kirkpatrick, Sec'y, CFTC (Aug. 18, 2025) (highlighting “questions regarding how [CTXs] fit[ ] within key DCM requirements such as mandatory clearing. [ ] CCI encourages the Commission to closely examine [ ] how DCMs can begin to offer these products in a safe and viable manner”); Letter from Coinbase to Christopher J. Kirkpatrick, Sec'y, CFTC (Aug. 18, 2025) (“Coinbase Letter”) (emphasizing that “the CFTC should carefully consider the proper application of the CEA to crypto asset spot markets listed and traded on a DCM”); Commissioner Dawn D. Stump, Concurring Statement Regarding Enforcement Action Against Payward Ventures, Inc. (d/b/a Kraken) (Sept. 28, 2021), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​stumpstatement092821b (“Stump Payward Statement”) (emphasizing that with respect to the on-exchange requirement “it is incumbent upon the Commission to undertake a rulemaking proceeding to supersede [the Commission's now withdrawn 2020 interpretive guidance on section 2(c)(2)(D)] by adopting binding and enforceable rules that will provide certainty to the marketplace and a shared understanding of the `rules of the road.' ”). See infra note 87 for a further discussion of the withdrawn interpretive guidance referenced by Commissioner Stump.

20.   See Congressional Research Service, Telegraphs, Steamships, and Virtual Currency: An Analysis of Money Transmitter Regulation, at 1 (Aug. 20, 2020), available at www.congress.gov/​crs_​external_​products/​R/​PDF/​R46486/​R46486.2.pdf (describing how the term “money transmission” typically refers to three general functions: (1) receiving and sending money on behalf of consumers; (2) providing products that receive, store, or send money for consumers; and (3) providing an exchange for currencies); see also id. at 16 (quoting testimony of SEC Chairman Jay Clayton that “many of the U.S.-based [crypto asset] trading platforms have elected to be regulated as money-transmission services” and are “predominantly state-regulated”).

21.  23 NYCRR 200.3.

22.  Cal. Fin. Code 3201.

23.   See, e.g., FinCEN, FIN-2016-G001, Guidance on Existing AML Program Rule Compliance Obligations for MSB Principals with Respect to Agent Monitoring (Mar. 11, 2016); see also31 CFR 1022.320 (requiring MSBs to file with the Department of the Treasury a report of any suspicious transaction relevant to a possible violation of law or regulation, under the circumstances described therein).

24.   See, e.g.,31 CFR 1010.311-314 (currency transaction reporting), 31 CFR 1010.410(e)-(f) (records and information accompanying transmittal of funds), 31 CFR 1022.210(b), (d) (risk-based anti-money-laundering programs, including customer identification verification, reporting, and recordkeeping); see also FinCEN, FIN-2019-G001, Application of FinCEN's Regulations to Certain Business Models Involving Convertible Virtual Currencies (May 9, 2019), available at www.fincen.gov/​system/​files/​2019-05/​FinCEN%20Guidance%20CVC%20FINAL%20508.pdf.

25.  Timothy G. Massad, Economic Studies at Brookings, It's Time to Strengthen the Regulation of Crypto-Assets (Mar. 2019), available at www.brookings.edu/​wp-content/​uploads/​2019/​03/​Economis-Studies-Timothy-Massad-Cryptocurrency-Paper.pdf (“As a general matter, state regulation would be a weak foundation for an industry that strives to be international. When regulatory requirements vary by state, it is expensive to build compliance systems, and difficult to create national, let alone international, markets. Our securities markets would not have become the envy of the world if we had relied solely on state blue sky laws and never adopted the Securities Act and [ ] Exchange Act. We should not expect state law to fill the need for this new [crypto asset] sector either.”) ; see also statement submitted by the Chamber of Digital Commerce, in Examining Regulatory Frameworks for Digital Currency and Blockchain: Testimony for the Record United States Senate Committee on Banking, Housing, and Community Affairs Hearing (July 30, 2019), available at www.govinfo.gov/​content/​pkg/​CHRG-116shrg38950/​pdf/​CHRG-116shrg38950.pdf (“This patchwork of state and federal regulations is expensive[.] For blockchain companies, many of which are growing start-ups with seasoned industry executives, this antiquated and inconsistent framework poses a high barrier to entry. The current framework [. . .] [is] not well-suited for digital companies whose business and service models are inherently global in nature and may not fit the traditional descriptions of `money transmitters.' ”).

26.   See Congressional Research Service, supra note 20, at 2, 4 (describing “49 unique state regulatory frameworks” and noting that the absence of a federal framework has caused numerous efforts to reduce the friction associated with varying regulatory obligations across jurisdictions).

27.   Id.

28.   See generally U.S. Government Accountability Office, GAO-17-361, Financial Technology: Information on Subsectors and Regulatory Oversight (Apr. 2017), available at www.gao.gov/​assets/​gao-17-361.pdf (describing efforts to coordinate multistate licensing exams to address variations among state money transmitter requirements).

29.   See Congressional Research Service, supra note 20, at 2, 4.

30.   See generally Benjamin Geva, The Concept of Payment Mechanism, 24 Osgoode Hall L.J. 1, 4-5 (1986).

31.   See, e.g., Conference of State Bank Supervisors, Money Transmission Modernization Act §§ 1.02, 9.01-9.03 (2021, as amended), available at www.csbs.org/​csbs-money-transmission-modernization-act-mtma.

32.  In addition to the congressional findings discussed supra note 9, the other primary U.S. federal statute that regulates how financial markets operate, the Exchange Act, provides that “[it] is in the public interest and appropriate for the protection of investors and the maintenance of fair and orderly markets to assure [ ] fair competition among brokers and dealers, among exchange markets, and between exchange markets and markets other than exchange markets[;] The linking of all markets for qualified securities through communication and data processing facilities will foster efficiency, enhance competition, increase the information available to brokers, dealers, and investors, facilitate the offsetting of investors' orders, and contribute to best execution of such orders[.]” 15 U.S.C. 78k-1 (emphasis added).

33.   See Financial Stability Oversight Council, Report on Digital Asset Financial Stability Risks and Regulation, at 5 (Oct. 3, 2022), available at home.treasury.gov/​system/​files/​261/​FSOC-Digital-Assets-Report-2022.pdf.

34.   Id. at 4.

35.   See Satoshi Nakamoto, Bitcoin: A Peer-to-Peer Electronic Cash System (Oct. 31, 2008), available at bitcoin.org/​bitcoin.pdf. The Commission notes that “Satoshi Nakamoto” is a pseudonym that was used by the person or group of persons that created the Bitcoin network. See, e.g., LabCFTC, A CFTC Primer on Virtual Currencies, at 5 (Oct. 17, 2017), available at www.cftc.gov/​sites/​default/​files/​idc/​groups/​public/​documents/​file/​labcftc_​primercurrencies100417.pdf.

36.  Vitalik Buterin, Ethereum: A Next-Generation Smart Contract and Decentralized Application Platform, at 34 (2014), available at ethereum.org/​content/​whitepaper/​whitepaper-pdf/​Ethereum_​Whitepaper_​-_​Buterin_​2014.pdf. See also Sections I.A.1 and II.C.2, infra, for a further discussion on how uses of crypto assets have evolved since the introduction of blockchain networks such as Ethereum.

37.   See, e.g., CEA 3(b), 7 U.S.C. 5(b). See also Section II.C.1, infra, for a further discussion of the effectiveness of the Act's customer protection regime (describing how the customer assets held by a Commission-registered FTX entity remained properly segregated and safeguarded, in contrast to 130 other FTX affiliate entities that entered bankruptcy).

38.   See, e.g.,17 CFR 38.151(b).

39.   See Massad, supra note 25, at 35 (with respect to the limited jurisdiction of state regulators, providing that “it is worth considering whether this licensing requirement can significantly improve the [crypto asset] market. It is difficult for [the New York Department of Financial Services], as a state regulator with limited jurisdiction over these markets, to have much of an impact. One could even question whether its licensing requirement has given a false sense of legitimacy to those that have bothered to register.”) (emphasis added).

40.   See, e.g., CEA 5(d)(9), 7 U.S.C. 7(d)(9) (mandating the provision of competitive, open, and efficient market and mechanism for executing transactions); CEA 5(d)(16), 7 U.S.C. 7(d)(16) (mandating the minimization of conflicts of interest that could jeopardize the fair operation of a contract market); 17 CFR part 38, appendix C, subparagraph (a)(1) (providing guidance as to how to design contracts that meet the risk management needs of prospective users and promote price discovery of the underlying commodity).

41.   See, e.g., CEA 5(d)(3), 7 U.S.C. 7(d)(3) (prohibiting contracts readily susceptible to manipulation); CEA 5(d)(5), 7 U.S.C. 7(d)(5) (mandating contracts impose position limitations to the extent necessary and appropriate to reduce the potential threat of market manipulation or congestion); CEA 5(d)(12), 7 U.S.C. 7(d)(12) (mandating the establishment and enforcement of rules to protect markets and market participants from abusive practices).

42.   See, e.g., CEA 3(b), 7 U.S.C. 5(b) (“To foster these public interests, it is further the purpose of this chapter to deter and prevent price manipulation or any other disruptions to market integrity; to ensure the financial integrity of all transactions subject to this chapter and the avoidance of systemic risk”).

43.   See, e.g., CEA 5(d)(11), 7 U.S.C. 7(d)(11) (mandating the establishment and enforcement of rules for ensuring the financial integrity of transactions entered into on or through the facilities of the contract market, including the clearance and settlement of the transactions with a derivatives clearing organization (“DCO”)). A registered DCO is subject to 18 core principles set out in section 5b(c)(2) of the Act. The core principles cover areas ranging from clearing member eligibility standards, risk management, default procedures, treatment of funds, rule enforcement, and legal risk. A DCO must comply with the DCO core principles and the requirements of any rule the CFTC may impose pursuant to its general rulemaking authority. See Johnson et al., § 6.06; CFTC, Strategic Plan 2011-2015 (2011), available at www.cftc.gov/​sites/​default/​files/​reports/​strategicplan/​2015/​2015strategicplan04.html.

44.   See Section II.C.1, infra, for a further discussion of the effectiveness of the Act's customer protection regime.

45.  Consumer Financial Protection Bureau, Analysis of Deposit Insurance Coverage on Funds Stored Through Payment Apps (June 1, 2023), available at www.consumerfinance.gov/​data-research/​research-reports/​issue-spotlight-analysis-of-deposit-insurance-coverage-on-funds-stored-through-payment-apps/​full-report/​ (providing, further, that the Consumer Financial Protection Bureau “find[s] that stored funds can be at risk of loss in the event of financial distress or failure of the entity operating the nonbank payment platform, and often are not placed in an account at a bank or credit union and lack individual deposit insurance coverage.”); see also Complaint ¶ 2, FTC v. Voyager Digital, LLC, No. 1:23-cv-08960 (S.D.N.Y. Oct. 12, 2023), ECF No. 1 (alleging, among other matters, Voyager Digital, LLC and its affiliates (“Voyager”), which held money transmitter licenses in 13 states, deceived consumers into transferring their fiat and crypto assets to the Voyager platform by portraying Voyager as a safe alternative to the traditional financial system); Stipulated Order for Permanent Injunction, Monetary Judgment, and Other Relief at 7, FTC v. Voyager Digital, LLC, No. 1:23-cv-08960 (S.D.N.Y. Nov. 24, 2023), ECF No. 35 (entering, and suspending, a $1.65 billion judgment). In re Voyager Digital LLC, Order No. 22-70-S, at 1 (Alaska Div. of Banking & Sec. Sept. 3, 2022). Voyager pooled customers' crypto assets in an omnibus account and lent those crypto assets to institutional borrowers, including a loan of $350 million (denominated in stablecoins) and 15,250 BTC to Three Arrows Capital. Id. at 2-4; Voyager Digital Ltd., Voyager Digital Provides Market Update (PR Newswire June 27, 2022), available at www.prnewswire.com/​news-releases/​voyager-digital-provides-market-update-301575492.html. Moreover, at least one state in which Voyager was licensed permitted money transmitters to hold up to half of the investments backing customer obligations in higher-risk assets such as publicly traded stocks. See Iowa Code 533C.602(2)(b), (3) (2022); Settlement Agreement and Consent Order at 1, In re Voyager Digital, LLC (Ariz., Ark., Ill., Iowa, & S.D. Dec. 28, 2022). By contrast, the CFTC's regulatory framework limits investments of customer funds by an FCM or DCO to an enumerated set of low-risk instruments, subject to concentration limits, and requires an independent risk management unit, credit and liquidity risk tolerance limits, and periodic risk exposure reporting, as well as disclosure that customer funds are not insured against intermediary insolvency. See CEA 4d(a)(2), 7 U.S.C. 6d(a)(2); 17 CFR 1.11(c), (d), (e)(1)-(2), 1.25(a)(1), (b)(3), 1.55(a), (b)(2)-(c).

46.   See, e.g., Requirements for Derivatives Clearing Organizations, Designated Contract Markets, and Swap Execution Facilities Regarding the Mitigation of Conflicts of Interest,75 FR 63732, 63736 (Oct. 18, 2010) (“[T]herefore, although each DCM [ ] is a commercial enterprise, the fact that each entity has self-regulatory obligations means that each entity is not simply a corporation, but a corporation charged with the public trust.”).

47.   See, e.g., CEA 5(d)(2), 7 U.S.C. 7(d)(2) (setting forth self-regulatory authority and obligations for DCMs).

48.   See, e.g., CEA 5(d)(13), 7 U.S.C. 7(d)(13) (mandating DCMs establish and enforce disciplinary procedures that authorize the DCM to discipline, suspend, or expel members or market participants that violate the rules of the DCM).

49.   See, e.g., CEA 5(d)(4), 7 U.S.C. 7(d)(4).

50.  U.S. Department of the Treasury, Crypto-Assets: Implications for Consumers, Investors, and Businesses, at 9 (Sept. 2022), available at home.treasury.gov/​system/​files/​136/​CryptoAsset_​EO5.pdf.

51.   See generally the Honorable Dan Gallagher, Chief Legal, Compliance, and Corporate Affairs Officer, Robinhood Markets, Inc., Testimony Before the U.S. House of Representatives Committee on Agriculture (June 6, 2023), available at docs.house.gov/​meetings/​AG/​AG00/​20230606/​116051/​HHRG-118-AG00-Wstate-GallagherD-20230606.pdf; see also Press Release, SEC, BlockFi Agrees to Pay $100 Million in Penalties and Pursue Registration of its Crypto Lending Product (Feb. 14, 2022), available at www.sec.gov/​newsroom/​press-releases/​2022-26 (describing (i) that BlockFi Lending LLC (“BlockFi”), which held 47 licenses across 32 states and Washington, DC, made a false and misleading statement for more than two years on its website concerning the level of risk in its loan portfolio and lending activity, among other matters; and (ii) a resulting $50 million penalty to the SEC and $50 million in parallel state settlements); Declaration of Mark A. Renzi in Support of Debtors' Chapter 11 Petitions and First-Day Motions ¶ 23, In re BlockFi Inc., No. 22-19361 (MBK) (Bankr. D.N.J Nov. 28, 2022), ECF. No. 17; Notice of Automatic Suspension, Notice of Intent To Revoke Money Transmission License, Notice of Intent To Issue Order To Cease And Desist, Notice of Intent To Impose Civil Penalty and Notice of Right To Hearing ¶¶ 7-11, 16, In re BlockFi Trading LLC (Conn. Dep't of Banking Feb. 14, 2023) (alleging that BlockFi Trading LLC, a Connecticut-licensed money transmitter, engaged in an unsafe or unsound practice by suspending all customer withdrawals before filing for bankruptcy). In the aftermath of the BlockFi collapse, then-Commissioner Kristin N. Johnson urged crypto asset intermediaries to adopt the governance, risk management, and financial reserve safeguards long required of traditional financial market participants. See Kristin N. Johnson, Lessons Learned from the Recent Failures in the Crypto Asset Market, Eurofi Magazine (Apr. 2023), at 88-89, available at www.eurofi.net/​wp-content/​uploads/​2023/​06/​eurofi_​kristin-johnson_​lessons-learned-from-the-recent-failures-in-the-crypto-market_​stockholm_​april-2023.pdf.

52.   See supra notes 17, 45, 51 for examples of market abuses and customer protection failures in the crypto asset markets; see also Consent Order, In re Bittrex, Inc., Order No. 2023-010 (Tex. Dep't of Banking Apr. 5, 2023) (finding that Bittrex, Inc., a licensed money transmitter, failed to maintain the minimum net worth required of Texas money transmission licensees and requiring it to cease money transmission in Texas).

53.  The circumstances that led Congress to pass section 2(c)(2)(D) are discussed further in Sections II.A and B, infra. Although those circumstances related to fraud in the retail precious metals markets, and crypto assets were in nascent stages at that time, the legislative history of section 2(c)(2)(D) specifically contemplates that the market abuses addressed by section 2(c)(2)(D) in such precious metals markets would likely emerge in other commodity classes. Thus, section 2(c)(2)(D)'s extension of jurisdiction applies to 2(c)(2)(D) transactions in “any commodity.” See CEA 2(c)(2)(D)(i), 7 U.S.C. 2(c)(2)(D)(i); see also Hearing to Review Implications of the CFTC v. Zelener Case Before the Subcomm. on General Farm Commodities and Risk Management of the H. Comm. on Agriculture, 111th Cong. 52-664 (“ Zelener Hearing”) (statement of Rep. Collin C. Peterson, Chairman, H. Comm. on Agriculture, providing that “because the scope of the Zelener fix was limited to foreign exchange contracts, we need to be aware that similar problems could arise in other product areas like metals, energy, or any other commodity that can be sold to the public without effective regulation.”).

54.  President's Working Group's Report at 18.

55.   Id. at 51.

56.   Id. at 52 (recommending the CFTC “[p]rovide guidance to designated contract markets (DCMs) regarding the listing of leveraged, margined, or financed spot retail commodity transactions on [crypto] assets pursuant to CEA section 2(c)(2)(D)”).

57.  156 Cong. Rec. S5924 (daily ed. July 15, 2010) (statement of Sen. Lincoln, explaining the rationale for the legislation during floor debate on the Dodd-Frank Act).

58.  Satoshi Nakamoto, Bitcoin v0.1 released, Cryptography Mailing List (Jan. 8, 2009), available at www.metzdowd.com/​pipermail/​cryptography/​2009-January/​014994.html (announcing the first public release of the Bitcoin software); see also Bitcoin Block 0 (Genesis Block), hash 000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f (Jan. 3, 2009), available at mempool.space/​block/​000000000019d6689c085ae165831e934ff763ae46a2a6c172b3f1b60a8ce26f.

59.  CFTC Chairman Timothy Massad, Testimony Before the U.S. Senate Committee on Agriculture, Nutrition & Forestry (Dec. 10, 2014), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​opamassad-6.

60.  CFTC, CFTC Statement on Self-Certification of Bitcoin Products by CME, CFE and Cantor Exchange, Release No. 7654-17 (Dec. 1, 2017) (quoting former Chairman J. Christopher Giancarlo), available at www.cftc.gov/​PressRoom/​PressReleases/​7654-17.

61.   See Buterin, supra note 36, at 1. The term “Turing-complete” refers to a programmable system that can solve any computational problem. The concept comes from the Turing machine, a theoretical model of computation devised by English mathematician and cryptographer Alan Turing. Conversely, a non-Turing-complete system, such as the Bitcoin network, is limited to performing particular tasks based on pre-defined instructions; see generally Gavin Wood, Ethereum: A Secure Decentralised Generalised Transaction Ledger (Apr. 4, 2022), available at ethereum.org/​content/​developers/​tutorials/​yellow-paper-evm/​yellow-paper-berlin.pdf (explaining the impact of Turing-completeness for Ethereum); see also Nick Szabo, Smart Contracts: Building Blocks for Digital Markets (1996), available at www.fon.hum.uva.nl/​rob/​Courses/​InformationInSpeech/​CDROM/​Literature/​LOTwinterschool2006/​szabo.best.vwh.net/​smart_​contracts_​2.html (introducing the concept of smart contracts, which may be designed using a Turing-complete programming language).

62.   See Buterin, supra note 36, at 13.

63.   See Nakamoto, supra note 35, at 1.

64.  Fred Ehrsam, Blockchain Governance: Programming Our Future (Nov. 27, 2017), available at www.fehrsam.xyz/​blog/​blockchain-governance-programming-our-future.

65.  Chris Dixon, Read, Write, Own: Building the Next Era of the internet, at 75 (2024).

66.   See Joint Crypto Asset Taxonomy, supra note 1, 91 FR at 13718 (“a functional crypto system may require users to pay transaction (or “gas”) fees in the system's native digital commodity. These gas fees—in addition to units of the digital commodity newly generated by the protocol—typically are used as an incentive mechanism to reward participation in and use of the associated functional crypto system.”) ; see also Andreas M. Antonopoulos & Gavin Wood, Mastering Ethereum: Building Smart Contracts and DApps, ch. 13 (2018), available at github.com/​ethereumbook/​ethereumbook/​blob/​first_​edition_​first_​print/​13evm.asciidoc (“While gas has a price, it cannot be `owned' nor `spent.' Gas exists only inside the [Ethereum Virtual Machine (“EVM”)], as a count of how much computational work is being performed. The sender is charged a transaction fee in ether, which is then converted to gas for EVM accounting and then back to ether as a transaction fee paid to the miners.”).

67.   See Proof of Stake Alliance, U.S. Federal Securities and Commodity Law Analysis of Liquid Staking Receipt Tokens, at 2 (Feb. 21, 2023), available at www.proofofstakealliance.org/​22123-posa-liquid-staking-legal-white-paper (“POSA Liquid Staking Paper”) (explaining that blockchains “require a distributed group of users to operate computers, known as `nodes,' which run all or part of the software necessary for the system to function because it has no central operator. Each blockchain's underlying code incorporates a method for validating transactions called a `consensus algorithm' to incentivize nodes to contribute valuable resources to the blockchain to provide transaction settlement assurances to the network's users. The consensus algorithm ensures that each node will be rewarded with an amount of a digitally native resource—a crypto asset—in accordance with the rules of the algorithm, for so long as the node remains online and operates in accordance with the blockchain's technical requirements.”); see also Nic Carter, It's the settlement assurances, stupid (July 22, 2019), available at medium.com/​@nic_​_​carter/​its-the-settlement-assurances-stupid-5dcd1c3f4e41.

68.   See Ethereum Foundation, Gas and fees (June 24, 2026), available at ethereum.org/​developers/​docs/​gas/​ (“Gas is essential to the Ethereum network. It is the fuel that allows it to operate, in the same way that a car needs gasoline to run.”). Crypto assets may also convey rights to artwork, music, videos, trading cards, in-game items, s ee Joint Crypto Asset Taxonomy, supra note 1, at 13718, perform a practical function, such as a membership, ticket, credential, title instrument, or identity badge, id. at 13719, or enable holders to participate in the system's consensus mechanism by staking (or locking up) the system's native crypto asset, or to participate in onchain governance systems, id. at 13718. See also Ehrsam, supra note 64.

69.   See Joint Crypto Asset Taxonomy, supra note 1, at 13717.

70.   See CEA 1a(9), 7 U.S.C. 1a(9). “Even the SEC envied the CFTC—or soon envied it. Congress buried among the 1974 amendments to the Commodity Exchange Act an expanded definition of the term `commodity' to include literally anything, with one exception [for onions], which was or might in the future be the subject of futures trading.” John H. Stassen, The Commodity Exchange Act in Perspective: A Short and Not-So-Reverent History of Futures Trading Legislation in the United States, 39 Wash. & Lee L. Rev. 825, 834 (1982). Congress subsequently added a second exclusion in 2010 for motion picture box office receipts. See CEA 1a(9), 7 U.S.C. 1a(9) (excluding “onions . . . and motion picture box office receipts . . . [.]”).

71.   See Johnson et al., supra note 2, § 2.03. The breadth of this definition makes clear that lawmakers chose not to fragment regulatory authority over commodity derivatives markets based upon the underlying commodity. They reasoned that “[t]he nature of the underlying commodity is not an adequate basis to divide regulatory authority.” Report on S. 2391 of the Senate Agriculture, Nutrition, and Forestry Committee, S. Rep. No. 95-850, at 22-23 (1978). While “Federal regulation of most derivatives pivots on whether a `commodity' is involved,” the CEA excludes certain transactions in commodities from the CFTC's jurisdiction. See Johnson et al., supra note 2, § 3.02. For example, although a “security” (as defined in the Federal securities laws, infra note 112) may constitute a “commodity” under the Act, CEA 2(c)(2)(D)(ii) excepts from the Commission's jurisdiction thereunder a contract of sale of “any security,” regardless of whether the transaction otherwise satisfies the statutory criteria in CEA 2(c)(2)(D)(i). CEA 2(c)(2)(D)(i)-(ii), 7 U.S.C. 2(c)(2)(D)(i)-(ii); Johnson et al., supra note 2, § 4.03.

72.  CEA 1a(19), 7 U.S.C. 1a(19); see also Johnson et al., supra note 2, § 3.02. The enactment of the Commodity Futures Trading Commission Act dramatically expanded the definition of “commodity,” which, before 1974, only encompassed certain itemized agricultural commodities. Id. Then, in amendments adopted in 2000, three additional types of commodities were introduced, including “excluded commodities,” which is defined to encompass various intangible commodities such as “financial measures, instruments and risks, such as interest rates, exchange rates, currencies, credit risks or measures, securities and macroeconomic indices or measures and the `occurrence, extent of an occurrence[,] or contingency' subject to various limitations[.]” Id.; CEA 1a(19), 7 U.S.C. 1a(19); see also CFTC v. McDonnell, 287 F. Supp. 3d 213, 228 (E.D.N.Y. 2018) (“[crypto assets] can be regulated by [the] CFTC as a commodity. They fall well-within the common definition of `commodity' as well as the CEA's definition of `commodities' as `all other goods and articles . . . in which contracts for future delivery are presently or in the future dealt in.'”).

73.  Hayden Adams, Noah Zinsmeister & Dan Robinson, Uniswap v2 Core, at 1 (Mar. 2020), available at app.uniswap.org/​whitepaper.pdf (“Uniswap v1 is an on[ ]chain system of smart contracts on the Ethereum blockchain, implementing an automated liquidity protocol based on a `constant product formula.' Each Uniswap v1 pair stores pooled reserves of two [crypto] assets, and provides liquidity for those two [crypto] assets, maintaining the invariant that the product of the reserves cannot decrease.”).

74.  Lorenz Breidenbach et al., Chainlink 2.0: Next Steps in the Evolution of Decentralized Oracle Networks, at 1 (Apr. 15, 2021), available at research.chain.link/​Chainlink-Whitepaper-Next-Steps-in-the-Evolution-of-Decentralized-Oracle-Networks.pdf (“We foresee an increasingly expansive role for oracle networks, one in which they complement and enhance existing and new blockchains by providing fast, reliable, and confidentiality-preserving universal connectivity and [offchain] computation for smart contracts.”).

75.  Aave, Protocol Whitepaper, at 1 (Jan. 2020), available at github.com/​aave/​aave-protocol/​blob/​master/​docs/​Aave_​Protocol_​Whitepaper_​v1_​0.pdf (“The birth of the Aave Protocol marks Aave's shift from a decentralized [peer to peer] lending strategy [ ] to a pool-based strategy. Lenders provide liquidity by depositing cryptocurrencies in a pool contract. Simultaneously, in the same contract, the pooled funds can be borrowed by placing a collateral. Loans do not need to be individually matched, instead they rely on the pooled funds, as well as the amounts borrowed and their collateral.”); s ee also Rebecca Rettig, Michael Mosier & Katja Gilman, Genuine DeFi as Critical Infrastructure: A Conceptual Framework for Combating Illicit Finance Activity in Decentralized Finance 11 J. Fin. Reg. 215, 227 (2025), available at doi.org/​10.1093/​jfr/​fjaf005 (providing that “DeFi protocols have proliferated in the last half decade to include exchanging or swapping through decentralized exchanges or `DEXs' ( e.g., Uniswap) or DEX aggregators ( e.g., Paraswap), liquidity provision and borrowing ( e.g., Compound, Aave), yield generation via liquid staking ( e.g., Lido), investing ( e.g., Enzyme Finance); and insurance ( e.g., Nexus Mutual), among others”); see also Fabian Schär, Decentralized Finance: On Blockchain- and Smart Contract-Based Financial Markets, 103 Fed. Res. Bank of St. Louis Rev. 153, 153 (2021), available at www.stlouisfed.org/​publications/​review/​2021/​02/​05/​decentralized-finance-on-blockchain-and-smart-contract-based-financial-markets (“The term decentralized finance (DeFi) refers to an alternative financial infrastructure built on top of the Ethereum blockchain. DeFi uses smart contracts to create protocols that replicate existing financial services in a more open, interoperable, and transparent way.”).

76.  Schär, supra note 75, at 153 (describing “an immutable and highly interoperable financial system with unprecedented transparency, equal access rights, and little need for custodians, central clearing houses, or escrow services, as most of these roles can be assumed by `smart contracts.'); see also Fabian Schär et al., The Anatomy of Stablecoin Transactions, BIS Working Paper No. 1359 (June 2026), available at www.bis.org/​publ/​work1359.pdf.

77.   See Kristin N. Johnson, Decentralized Finance: Regulating Cryptocurrency Exchanges, 62 Wm. & Mary L. Rev. 1911 (2021).

78.   See generally Yesha Yadav, The Centralization Paradox in Cryptocurrency Markets, 100 Wash. U. L. Rev. 1725 (2023).

79.  CFTC Commissioner J. Christopher Giancarlo, Special Address Before the Depository Trust & Clearing Corporation 2016 Blockchain Symposium (Mar. 29, 2016), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​opagiancarlo-13.

80.   In re BFXNA Inc. (d/b/a Bitfinex), CFTC Docket No. 16-19, 2016 WL 3137612 (June 2, 2016); see also CFTC, CFTC Orders Bitcoin Exchange Bitfinex to Pay $75,000 for Offering Illegal Off-Exchange Financed Retail Commodity Transactions and Failing to Register as a Futures Commission Merchant, Release No. 7380-16 (June 2, 2016), available at www.cftc.gov/​PressRoom/​PressReleases/​7380-16.

81.   See Giancarlo, supra note 79.

82.   Request for Input on Crypto-Asset Mechanics and Markets,83 FR 64563 (Dec. 17, 2018).

83.  CFTC, CFTC Launches LabCFTC as Major Fintech Initiative, Release No. 7558-17 (May 17, 2017), available at www.cftc.gov/​PressRoom/​PressReleases/​7558-17. Several months later, LabCFTC published its inaugural explanatory volume on crypto assets, and, the following year, a follow-on primer on smart contracts; see A CFTC Primer on Virtual Currencies, supra note 35; LabCFTC, A Primer on Smart Contracts (Nov. 27, 2018), available at www.cftc.gov/​sites/​default/​files/​2018-11/​LabCFTC_​PrimerSmartContracts112718.pdf.

84.   See CFTC Statement on Self-Certification of Bitcoin Products, supra note 60.

85.  CFTC and SEC, Joint Statement from CFTC and SEC Enforcement Directors Regarding Virtual Currency Enforcement Actions (Jan. 19, 2018), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​mcdonaldstatement011918; see also Jay Clayton & J. Christopher Giancarlo, Regulators Are Looking at Cryptocurrency, Wall St. J. (Jan. 24, 2018), available at www.wsj.com/​articles/​regulators-are-looking-at-cryptocurrency-1516836363.

86.  CFTC, Advisory with Respect to Virtual Currency Derivative Product Listings, CFTC Staff Advisory No. 18-14 (May 21, 2018) (later withdrawn), available at www.cftc.gov/​PressRoom/​PressReleases/​9059-25.

87.   See Retail Commodity Transactions Involving Virtual Currency,82 FR 60335 (Dec. 20, 2017). Three years later in 2020, the Commission issued final interpretive guidance on the same subject. See Retail Commodity Transactions Involving Certain Digital Assets,85 FR 37734 (June 24, 2020) (“2020 Actual Delivery Guidance”). However, the Commission later withdrew the 2020 Actual Delivery Guidance (i) in order to reevaluate its relevance in light of the rapid technological evolution of crypto assets and blockchain technologies; and (ii) in response to the findings and recommendations for the CFTC contained in the President's Working Group's Report; see Withdrawal of Interpretive Guidance: Retail Commodity Transactions Involving Certain Digital Assets,90 FR 58149 (Dec. 16, 2025); President's Working Group's Report at 141. At the time of the withdrawal, then-Acting Chairman Pham described the 2020 Actual Delivery Guidance as “outdated and overly complex guidance that penalizes the crypto industry and stifles innovation.” CFTC, Acting Chairman Pham Announces Withdrawal of Outdated Digital Assets Guidance, Release No. 9152-25 (Dec. 11, 2025), available at www.cftc.gov/​PressRoom/​PressReleases/​9152-25.

88.  CFTC, CFTC Charges Trading Platform with Illegal Transactions Margined in Bitcoin, Failing to Implement Procedures to Prevent Money-Laundering, and Failing to Register with the CFTC, Release No. 7809-18 (Sept. 27, 2018), available at www.cftc.gov/​PressRoom/​PressReleases/​7809-18.

89.  CFTC, Chairman Tarbert Comments on Cryptocurrency Regulation at Yahoo! Finance All Markets Summit (Oct. 10, 2019), available at www.cftc.gov/​PressRoom/​PressReleases/​8051-19.

90.   See generally Request for Input on Crypto-Asset Mechanics and Markets, supra note 82.

91.  CFTC, Keynote Address of CFTC Commissioner J. Christopher Giancarlo Before the Cato Institute, Cryptocurrency: The Policy Challenges of a Decentralized Revolution (Apr. 12, 2016), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​opagiancarlo-14.

92.   See generally Stump Payward Statement, supra note 19.

93.   In re Payward Ventures, Inc. (d/b/a Kraken), CFTC No. 21-20 (Sept. 28, 2021).

94.   See Stump Payward Statement, supra note 19.

95.   Id.

96.   Id.

97.   In re bZeroX, LLC, CFTC No. 22-31, 2022 WL 4597664 (Sept. 22, 2022) (administrative case imposing $250,000 penalty); CFTC v. Ooki DAO, No. 22-cv-05416, 2023 WL 5321527 (N.D. Cal. June 8, 2023) (entering default judgment).

98.   See, e.g., Reply Brief of Amicus Curiae DeFi Education Fund Regarding Plaintiff's Motion for Alternative Service, CFTC v. Ooki DAO, No. 3:22-cv-05416 (N.D. Cal. Nov. 21, 2022) ; see also Commissioner Summer K. Mersinger, Dissenting Statement Regarding Enforcement Actions Against: (1) bZeroX, LLC, Tom Bean, and Kyle Kistner; and (2) Ooki DAO (Sept. 22, 2022), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​mersingerstatement092222 (“Mersinger Ooki Statement”) (criticizing the enforcement action as constituting “blatant `regulation by enforcement' by setting policy based on new definitions and standards never before articulated by the Commission or its staff, nor put out for public comment.”).

99.  Letter from Daniel Lasko, on behalf of dYdX, to Christopher Kirkpatrick, Sec'y, CFTC (Sept. 24, 2025) (“dYdX Letter”).

100.   See Mersinger Ooki Statement, supra note 98.

101.   Id.

102.  CFTC, CFTC Issues Orders Against Operators of Three DeFi Protocols for Offering Illegal Digital Asset Derivatives Trading, Release No. 8774-23 (Sept. 7, 2023), available at www.cftc.gov/​PressRoom/​PressReleases/​8774-23.

103.   Id.

104.  CFTC, CFTC Issues Order Against Uniswap Labs for Offering Illegal Digital Asset Derivatives Trading, Release No. 8961-24 (Sept. 4, 2024), available at www.cftc.gov/​PressRoom/​PressReleases/​8961-24.

105.  Commissioner Summer K. Mersinger, Dissenting Statement Regarding Settlement with Uniswap Labs (Sept. 4, 2024), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​mersingerstatement090424 (“Mersinger Uniswap Statement”) (“Notice-and-comment rulemaking would provide the DeFi community, consumer advocates, industry representatives, and the American public with the opportunity to engage with the Commission and utilize their expertise and experience to suggest how DeFi could properly be regulated while remaining true to our obligations under the CEA. Regulation through enforcement is at best a band-aid.”).

106.   See generally Chris Brummer, Yesha Yadav, and David Zaring, Regulation by Enforcement, 96 S. Cal. L. Rev. 1297 (2024).

107.   See Commissioner Kristin N. Johnson, Statement Regarding CFTC Resolving Charges Against Three Decentralized Finance Companies: The Need for Oversight (Sept. 7, 2023), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​johnsonstatement090723b (“As I have stated many times, the absence of regulation directly addressing supervision of the growing [crypto] asset marketplace leaves vulnerable retail customers exposed and lacking long-established customer protections available in other asset classes. [. . .] In a largely unregulated market like [crypto] assets, information asymmetries may not only be more pronounced, but coupled with near opacity in certain business models, there may be a shroud obscuring information regarding the design and deployment of critical operational infrastructure, necessary risk management and corporate governance protocols (including policies governing conflicts of interest such as conflicts involving affiliated entities), sufficient liquidity reserves (effective recovery and resilience plans), dedicated commitment to the segregation of customer funds and separation of customer property, cyber risk resilience, or general system safeguards. In the dark, it may be difficult for customers to appreciate real risks and for regulators to use traditional surveillance tools to prevent fraud and market manipulation.”).

108.  E.O. No. 14178, Strengthening American Leadership in Digital Financial Technology,90 FR 8647 (Jan. 31, 2025).

109.   See GENIUS Act, supra note 1.

110.  E.O. No. 14178, supra note 108, at section 4(c)(i).

111.  President's Working Group's Report at 6; see alsoE.O. No. 14178, supra note 108, at section 4(c)(i).

112.  President's Working Group's Report at 48. The definition of “security” in both the Securities Act and the Exchange Act enumerates several instrument types, including “investment contract.” See 15 U.S.C. 77b(a)(1); 15 U.S.C. 78c(a)(10). The definitions are “virtually identical” in the Securities Act and Exchange Act and are treated by the courts as identical in “decisions dealing with the scope of the term.” Landreth Timber Co. v. Landreth, 471 U.S. 681, 686 n.1 (1985). The SEC and federal courts have historically applied the “ Howey test” to determine if a crypto asset or transaction therein constitutes an investment contract and therefore a security. See SEC v. W.J. Howey Co., 328 U.S. 293 (1946) (“ Howey”). The Howey test defines an investment contract as a contract, transaction, or scheme involving (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits derived from the efforts of others. Id.; see also Report of Investigation Pursuant to Section 21(a) of the Securities Exchange Act of 1934: The DAO, SEC Release No. 34-81207 (July 25, 2017); Gladius Network LLC, Release No. 33-10608 (Feb. 20, 2019); Paragon Coin, Inc., SEC Release No. 33 10574 (Nov. 16, 2018); In re Munchee, Inc., SEC Release No. 33-10445 (Dec. 11, 2017); SEC, Division of Corporation Finance no-action letter to IMVU, Inc. (Nov. 19, 2020).

113.  President's Working Group's Report at 51.

114.   Id. at 52.

115.   See, e.g., dYdX Letter, supra note 99; Coinbase, Petition for Rulemaking—Digital Asset Securities Regulation (July 21, 2022), available at www.sec.gov/​rules/​petitions/​2022/​petn4-789.pdf; Letter from Robinhood Markets, Inc. (Mar. 13, 2025), available at www.sec.gov/​files/​ctf-input-robinhood-2025-03-13.pdf; Letter from Andreessen Horowitz (Mar. 13, 2025), available at dwt2zme5yrom6.cloudfront.net/​uploads/​2025/​03/​a16z-Crypto-SEC-RFI-Questions-1-through-6-March-13-2025.pdf.

116.   See SEC, Crypto Task Force, available at www.sec.gov/​about/​crypto-task-force.

117.   See, e.g., SEC, Crypto Task Force Roundtables, available at www.sec.gov/​about/​crypto-task-force/​crypto-task-force-roundtables; see also www.sec.gov/​about/​crypto-task-force/​crypto-task-force-meetings;www.sec.gov/​about/​crypto-task-force/​crypto-task-force-written-input.

118.   See, e.g., SEC, Division of Corporation Finance, Staff Statement on Meme Coins (Feb. 27, 2025), available at www.sec.gov/​newsroom/​speeches-statements/​staff-statement-meme coins; see also SEC, Division of Corporation Finance, Statement on Certain Proof of-Work Mining Activities (Mar. 20, 2025), available at www.sec.gov/​newsroom/​speechesstatements/​statement-certain-proof-work-mining-activities-032025. The SEC staff statements are not a rule, regulation, guidance, or statement of the SEC, and the SEC has neither approved nor disapproved their content. SEC staff statements have no legal force or effect: they do not alter or amend applicable law, and they create no new or additional obligations for any person.

119.  CFTC, Acting Chairman Pham Announces CFTC Crypto Sprint, Release No. 9104-25 (Aug. 1, 2025), available at www.cftc.gov/​PressRoom/​PressReleases/​9104-25.

120.  CFTC, Acting Chairman Pham Launches Listed Spot Crypto Trading Initiative, Release No. 9105-25 (Aug. 4, 2025), available at www.cftc.gov/​PressRoom/​PressReleases/​9105-25.

121.   See, e.g., Letter from Allison Lurton, General Counsel, Chief Legal Officer, on behalf of Futures Industry Association, to Christopher Kirkpatrick, Sec'y, CFTC (Aug. 18, 2025), at 3.

122.   See, e.g., Letter from Thomas Johnson, Chief Compliance Officer, on behalf of tastyfx LLC, to Commissioners of the CFTC (Aug. 19, 2025), at 1.

123.   See, e.g., Letter from Linda Lacewell, Global Chief Legal Officer, on behalf of OKX US, to Christopher Kirkpatrick, Sec'y, CFTC (Aug. 18, 2025), at 4-5 (“OKX Letter”).

124.  CFTC, Acting Chairman Pham Announces First-Ever Listed Spot Crypto Trading on U.S. Regulated Exchanges, Release No. 9145-25 (Dec. 4, 2025), available at www.cftc.gov/​PressRoom/​PressReleases/​9145-25.

125.  Chairman Michael S. Selig, The Next Phase of Project Crypto: Unleashing Innovation for the New Frontier of Finance (Jan. 29, 2026), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​opaselig1 (“Chairman Selig Project Crypto Remarks”), providing that that “thanks to the leadership of President Trump, [ ] regulation by enforcement is dead.”

126.   Id. (“Today, we are building on that foundation. Rather than running a parallel initiative with the SEC, I am pleased to announce that the CFTC is partnering with the SEC on Project Crypto—bringing coordination, coherence, and a unified approach to the federal oversight of crypto asset markets. Project Crypto recognizes that crypto markets span across our agencies' respective regulatory boundaries.”).

127.  CFTC, SEC, CFTC and SEC Announce Historic Memorandum of Understanding Between Agencies, Release No. 9192-26 (Mar. 11, 2026) (“MOU Announcement”), available at www.cftc.gov/​PressRoom/​PressReleases/​9192-26.

128.   Id. See Section II.C, infra, for a further discussion of how the Commission's regulatory approach to crypto assets has driven innovation away from federally regulated venues. Other federal regulators have highlighted the harmful effects of friction between the Commissions. See, e.g., Department of the Treasury, Blueprint for a Modernized Financial Regulatory Structure, at 11 (Mar. 31, 2008), available at home.treasury.gov/​system/​files/​136/​archive-documents/​Blueprint.pdf (“Product and market participant convergence, market linkages, and globalization have rendered regulatory bifurcation of the futures and securities markets untenable, potentially harmful, and inefficient. To address this issue, the CFTC and the SEC should be merged to provide unified oversight and regulation of the futures and securities industries.”).

129.   See SEC Chairman Paul S. Atkins, The SEC's Approach to Digital Assets: Inside “Project Crypto” (Nov. 12, 2025), available at www.sec.gov/​newsroom/​speeches-statements/​atkins-111225-secs-approach-digital-assets-inside-project-crypto (“Commissioner Peirce has rightly observed that while a project's [crypto asset] launch might initially involve an investment contract, those promises may not remain forever. Networks mature. Code is shipped. Control disperses. The issuer's role diminishes or disappears.”).

130.   See, e.g., SEC v. Terraform Labs Pte. Ltd., 684 F. Supp 3d 170, 197 (S.D.N.Y. July 31, 2023) (“It may also be mentioned that the Court declines to draw a distinction between these [crypto assets] based on their manner of sale, such that [crypto assets] sold directly to institutional investors are considered securities and those sold through secondary market transactions to retail investors are not. In doing so, the Court rejects the approach recently adopted by another judge of this District in a similar case, SEC v. Ripple Labs, Inc. 2023 WL 4507900 (S.D.N.Y. July 13, 2023)”) (emphasis added); SEC v. Coinbase, Inc., 726 F. Supp. 3d 260, 293 (S.D.N.Y. Mar. 27, 2024) (similarly rejecting the Ripple court's reasoning and instead adopting reasoning akin to the Terraform court).

131.   See supra note 112, setting forth the definition of “security” under the Federal securities laws.

132.  Chairman J. Christopher Giancarlo, Remarks at the 4th Annual DC Blockchain Summit (Mar. 6, 2019), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​opagiancarlo66 (“Giancarlo Blockchain Summit Remarks”).

133.  SEC Commissioner Hester M. Peirce, The Journey Begins (Feb. 4, 2025), available at www.sec.gov/​newsroom/​speeches-statements/​peirce-journey-begins-020425.

134.  President's Working Group's Report at 45 (“U.S. regulatory agencies have attempted to classify [crypto] assets under existing frameworks. For example, the CFTC recognized that bitcoin and ether are commodities, while the SEC has treated other [crypto] assets as securities based on their structures, methods of distribution, and uses. Yet, without a clear and comprehensive classification system, market participants have had to navigate a patchwork of interpretations and guidance—a proverbial minefield for honest actors trying to lead the industry forward.”).

135.  The Board Of The International Organization Of Securities Commissions, IOSCO Decentralized Finance Report, at 30, 32 (Mar. 1, 2022), available at www.iosco.org/​library/​pubdocs/​pdf/​IOSCOPD699.pdf (describing how in order to accrue the network effects that are “crucial” to most protocols, a project's pathway to decentralization may include a distribution of crypto assets to “early adopters (sometimes accomplished through “airdrops”), protocol users and liquidity providers, engineers that evolve and improve the code, purchasers of the [crypto asset] in the secondary market, and third-party service providers ( e.g., auditing firms) that are paid in [crypto assets] for their services”); see also Section II.C.2, infra, for a further discussion regarding how restricted or limited secondary markets in crypto assets can hinder or prevent decentralized market forces from facilitating network effects that otherwise could harness productive behavior for the benefit of a blockchain system; Andreessen Horowitz, Comments on the SEC Crypto Task Force's Questions Concerning the Security Status of Crypto Assets (Mar. 13, 2025), available at dwt2zme5yrom6.cloudfront.net/​uploads/​2025/​03/​a16z-Crypto-SEC-RFI-Questions-1-through-6-March-13-2025.pdf (“a16z Letter”) (“[d]istribution of [crypto assets] can facilitate decentralization by enabling the system to function autonomously (eliminating operational control) as well as by eliminating voting control and reducing economic control of the system”); Stephen Wink & Shaun Musuka, Crypto—The Pursuit of Sufficient Decentralization, Bloomberg L. (Aug. 21, 2019), available at news.bloomberglaw.com/​securities-law/​insight-crypto-the-pursuit-of-sufficient-decentralization (“[i]t is difficult to imagine a scenario in which such [crypto asset] networks could achieve the critical mass of network participants necessary if such network participants were restricted [by the Federal securities laws] from exchanging their [crypto assets] in some way with other participants for other [crypto assets] as a means to continually broaden the universe of [crypto asset] holders.”).

136.  Petition for Permission to Appeal Pursuant to 28 U.S.C. 1292(b), SEC v. Coinbase, Inc., No. 25-145, at 1 (2d Cir. Jan. 17, 2025) (“There is no more pressing issue in securities law today than the scope of the [SEC's] authority to regulate secondary trades of digital assets”).

137.  CFTC, CFTC Joins SEC to Clarify the Application of Federal Securities Laws to Crypto Assets, Release No. 9198-26 (Mar. 17, 2026), available at www.cftc.gov/​PressRoom/​PressReleases/​9198-26; see also Joint Crypto Asset Taxonomy, supra note 1.

138.   See Joint Crypto Asset Taxonomy, supra note 1, at 13720, providing that a digital security (commonly known as a “tokenized” security) is a financial instrument enumerated in the definition “security” that is formatted as or represented by a crypto asset, where the record of ownership is maintained in whole or in part on or through one or more crypto networks. See also supra note 71, describing the jurisdictional boundaries between the CFTC and SEC with respect to transactions or derivatives referencing, involving, or relating to a security.

139.   See Joint Crypto Asset Taxonomy, supra note 1, at 13720, providing that a stablecoin is a crypto asset that is designed to maintain a stable value relative to a reference asset like the U.S. dollar. See also supra note 1 (describing how the GENIUS Act creates a comprehensive regulatory framework for a specific type of stablecoin called a “payment stablecoin”).

140.   See Joint Crypto Asset Taxonomy, supra note 1, at 13718, providing that a digital commodity is a crypto asset that is intrinsically linked to and derives its value from the programmatic operation of a crypto system that is functional, as well as supply and demand dynamics, rather than from the expectation of profits from the essential managerial efforts of others. In the Joint Crypto Asset Taxonomy, the Commissions provided their views as to examples of digital commodities, which include, among others, Bitcoin (BTC); Ether (ETH); Solana (SOL); Stellar (XLM); Tezos (XTZ); and XRP (XRP).

141.   See id., at 13718, providing that a digital collectible is a crypto asset that is designed to be collected and/or used and may represent or convey rights to artwork, music, videos, trading cards, in-game items, or digital representations or references to internet memes, characters, current events, or trends, among other things. A digital collectible does not have intrinsic economic properties or rights, such as generating a passive yield or conveying rights to future income, profits, or assets of a business enterprise or other entity, promisor, or obligor.

142.   See id., supra note 1, at 13719, providing that a digital tool is a crypto asset that performs a practical function, such as a membership, ticket, credential, title instrument, or identity badge. Digital tools are commonly issued for use in connection with crypto systems and are designed to perform practical functions within such systems. Digital tools often are non-transferrable or “soul-bound,” and their value is derived from their practical functionality.

143.  This Notice also refers to each of digital commodities, digital collectibles, and digital tools as “non-security crypto assets.”

144.   See Joint Crypto Asset Taxonomy, supra note 1, at 13721. The Joint Crypto Asset Taxonomy provided the Commissions' views that a non-security crypto asset becomes subject to an investment contract when an issuer offers it by inducing an investment of money in a common enterprise with representations or promises to undertake essential managerial efforts from which a purchaser would reasonably expect to derive profits. Under such circumstances, secondary market offers and sales of such a non-security crypto asset would constitute securities transactions that must be registered under the Securities Act or conducted pursuant to an available exemption from registration. The associated investment contract will continue to be transferred to subsequent purchasers of the non-security crypto asset in secondary market transactions until the non-security crypto asset separates from the issuer's representations or promises.

145.   See Joint Crypto Asset Taxonomy, supra note 1, at 13722-3. The Joint Crypto Asset Taxonomy set forth the Commissions' view that a non-security crypto asset would no longer be subject to an investment contract when: (1) the issuer has fulfilled its representations or promises to engage in essential managerial efforts, or (2) the purchaser would not reasonably expect the issuer to be able to fulfill or to continue to engage in the essential managerial efforts it represented or promised it would undertake.

146.  CFTC, Chairman Selig Announces Formation of New Innovation Task Force, Release No. 9201-26 (Mar. 24, 2026), available at www.cftc.gov/​PressRoom/​PressReleases/​9201-26 (“Innovation Task Force Release”).

147.   See Chairman Selig Project Crypto Remarks, supra note 125.

148.  CFTC, CFTC Staff Issues No-Action Position to Self-Custodial Crypto Asset Wallet Software Provider, Release No. 9197-26 (Mar. 17, 2026), available at www.cftc.gov/​PressRoom/​PressReleases/​9197-26 (providing that the Commission's Market Participants Division would not recommend that the Commission take an enforcement action against the developer of self-custodial crypto asset wallet software or its relevant personnel for failure to register as an IB or an associated person (“AP”) of an IB in relation to the developer's proposed provision and marketing of software to facilitate trading by its users with registered FCMs, IBs, and DCMs).

149.  CFTC, CFTC Staff Issues FAQs Concerning Registrant and Registered Entity Activities Relating to Crypto Assets and Blockchain Technologies, Release No. 9200-26 (Mar. 20, 2026), available at www.cftc.gov/​PressRoom/​PressReleases/​9200-26.

150.  CFTC, CFTC Staff Issues Advisory on 24/7 Trading, Clearing, and Settlement, Release No. 9239-26 (May 29, 2026), available at www.cftc.gov/​PressRoom/​PressReleases/​9239-26.

151.  CFTC, CFTC Approves BTCPERP Contract Submitted by KalshiEX, LLC, Release No. 9240-26 (May 29, 2026), available at www.cftc.gov/​PressRoom/​PressReleases/​9240-26.

152.   See, e.g., Vladimir Tenev, Chief Executive Officer, Robinhood Markets, Inc., Statement at the Inaugural CFTC Innovation Advisory Committee Meeting, at 00:32:38 (Aug. 20, 2026), www.youtube.com/​watch?​v=​9rTCARzj98I (“It's been a challenge navigating the patchwork of state-by-state regulations because [ ] not all of our products are available to all of our customers. [ ] So I think just a federal framework, aside from providing a certainty and durability and not, you know, having our customers worry about rules changing every four or eight years or whether an asset they're going to hold is going to have to be delisted one way or another, preventing their access to it, which I think just puts a cloud of uncertainty over everything, will directly make it so that we don't have to deal with multi-state access issues where some of our products are available in certain states. And I think that the customer, unfortunately, ends up suffering here, you know, more than the broker or the crypto firm in most cases”); see also Vicky Ge Huang, DRW's Don Wilson Encourages CFTC to Approve Perpetual Futures, Wall St. J. (Aug. 20, 2026), available at www.wsj.com/​livecoverage/​stock-market-today-dow-sp-500-nasdaq-08-20-2026/​card/​drw-s-don-wilson-encourages-cftc-to-approve-perpetual-futures-WBLJH1WD8D8M0rufCWC9; Caitlin Ostroff & Vicky Ge Huang, CFTC Committee Discussion on Prediction Markets Gets Heated, Wall St. J. (Aug. 20, 2026), available at www.wsj.com/​livecoverage/​stock-market-today-dow-sp-500-nasdaq-08-20-2026/​card/​cftc-committee-discussion-on-prediction-markets-gets-heated-yQwCEYhWu7zrrUU7vg67.

153.  SEC, Regulation Crypto Assets,91 FR 54510 (proposed Aug. 21, 2026) (“Regulation Crypto Assets”).

154.   Id. at 54553. The proposed Regulation Crypto Assets further contemplates codifying two exemptions from the registration requirements of the Securities Act that would facilitate capital formation and innovation within the crypto asset markets. Id. at 54529-53.

155.  President's Working Group's Report at 51.

156.   See proposed Regulation CTX in Section III, infra, which explicitly identifies certain circumstances that the Commission preliminarily understands would result in transactions in crypto assets being subject to section 2(c)(2)(D).

157.  The Ninth Circuit endorsed that approach in CFTC v. Co Petro Marketing Group, Inc., 680 F.2d 573, 576 (9th Cir. 1982) (holding that leveraged retail commodity contracts “sold merely for speculative purposes and which are not predicated upon the expectation that delivery of the actual commodity by the seller to the original contracting buyer will occur in the future” must be traded “through a member of a board of trade which has been designated by the [Commission] as a contract market.”).

158.   CFTC v. Zelener, 373 F.3d at 868-69 (7th Cir. 2004).

159.   Zelener Hearing, supra note 53, at 10 (statement of Daniel Roth, President and Chief Executive Officer of the National Futures Association).

160.   See section 742 of the Dodd-Frank Act; see also CEA 2(c)(2)(D), 7 U.S.C. 2(c)(2)(D).

161.  156 Cong. Rec. S5924 (daily ed. July 15, 2010) (statement of Sen. Lincoln, explaining the rationale for the legislation during floor debate on the Dodd-Frank Act); see also Dodd-Frank Act, section 742(a), 124 Stat. 1376, 1732-33 (2010).

162.   Id.

163.   Zelener Hearing, supra note 53, at 22 (statement of Rep. Marshall, Member, H. Comm. on Agriculture). Section 2(c)(2)(D)'s legislative history thereby frames the subparagraph's additional grant of statutory authority as an extension of the Commission's settled regulatory function to a new avenue of evasion, echoing the Congressional concerns that led to the passage of the Act in 1974. See, e.g., H.R. Rep. No. 93-975, at 44 (1974) (enacting Member of the CEA noting there had been 5.7 million unregulated commodity derivative contracts traded in the prior fiscal year, including new contract types that could not be regulated under the then current federal law).

164.   See Loper Bright Enterprises v. Raimondo, 603 U.S. 369, 371 (2024) (“when the best reading of a statute is that it delegates discretionary authority to an agency, the role of the reviewing court under the [Administrative Procedure Act] is, as always, to independently interpret the statute and effectuate the will of Congress subject to constitutional limits. The court fulfills that role by recognizing constitutional delegations, fixing the boundaries of the delegated authority, and ensuring the agency has engaged in `reasoned decisionmaking' [ ] within those boundaries.”).

165.  15 U.S.C. 8321(a), providing that the “Commission may adopt a rule to define [ ] (1) the term `commercial risk'; and (2) any other term included in an amendment to the [CEA] made by [the Dodd-Frank Act].”

166.   See Bitfinex, supra note 80, at 5.

167.  CEA 2(c)(2)(D)(i), 7 U.S.C. 2(c)(2)(D)(i) (including within the scope of section 2(c)(2)(D) any transaction that is “offered (even if not entered into), on a leveraged or margined basis . . .”). Courts have interpreted the provision in the same manner. See, e.g.,CFTC v. Laino Group Limited d/b/a PaxForex, 2021 WL 4059385 (S.D.T. June 30, 2021) (“Accordingly, Defendant by offering to enter into, or entering into transactions in gold, silver, bitcoin, ether, and litecoin with non-ECP U.S. customers on a leveraged or margined basis engaged in retail commodity transactions subject to 7 U.S.C. 2(c)(2)(D)(i)”) (emphasis added).

168.  CEA 2(c)(2)(D)(i)-(ii), 7 U.S.C. 2(c)(2)(D)(i)-(ii). This Notice further discusses fully paid, open (2)(c)(2)(D) transactions in Section III.C, infra.

169.   Zelener Hearing, supra note 53, at 9 (statement of Daniel Roth, President of the National Futures Association).

170.  CEA 2(c)(2)(D)(ii)(III)(aa), 7 U.S.C. 2(c)(2)(D)(ii)(III)(aa) (providing that “[t]his subparagraph shall not apply to [ ] (III) a contract of sale that—(aa) results in actual delivery within 28 days or such other longer period as the Commission may determine by rule or regulation based upon the typical commercial practice in cash or spot markets for the commodity involved[.]”).

171.  CEA 2(c)(2)(D)(i), 7 U.S.C. 2(c)(2)(D)(i).

172.  The Commission notes that “a contract of sale that creates an enforceable obligation to deliver between a seller and a buyer that have the ability to deliver and accept delivery, respectively, in connection with the line of business of the seller and buyer” is similarly excepted from the Commission's jurisdiction, regardless of whether it satisfies the statutory criteria contained in CEA 2(c)(2)(D)(i). CEA 2(c)(2)(D)(ii)(III)(bb), 7 U.S.C. 2(c)(2)(D)(ii)(III)(bb). The presence of the “enforceable obligation” described therein mirrors the act of “actual delivery” in that each distinguishes genuine cash market transactions from those that function as open futures contracts by merely serving as a vehicle for price exposure.

173.   CFTC v. Monex Credit Co., 931 F.3d 966, 974 (9th Cir. 2019) (“ Monex”). In addition to case law pertaining to the actual delivery exception and the withdrawn 2020 Actual Delivery Guidance, discussed supra note 87, the Commission issued in 2011 a proposed interpretation of the term “actual delivery” in the context of section 2(c)(2)(D) on an asset-class-agnostic basis, accompanied by a request for comment. Retail Commodity Transactions Under Commodity Exchange Act,76 FR 77670 (Dec. 14, 2011). After reviewing public comments, the Commission issued a final interpretation in 2013. Retail Commodity Transactions Under Commodity Exchange Act,78 FR 52426 (Aug. 23, 2013).

174.   Monex 931 F.3d at 974; see also CFTC v. Hunter Wise Commodities, LLC, 749 F.3d 967, 979 (11th Cir. 2014) (“ `[a]ctual' is that which `exist[s] in fact' and is `real,' rather than constructive.”) (quoting Black's Law Dictionary 494 (9th ed. 2009)).

175.   Monex 931 F.3d at 975.

176.   Id.

177.   See proposed Regulation CAM in Section V, infra, which contemplates the implementation of a fit-for-purpose regulatory framework that addresses the on-exchange requirement in the context of the commercial realities of, and risks posed by, CTXs.

178.  CEA 2(c)(2)(D)(i), 7 U.S.C. 2(c)(2)(D)(i).

179.  CEA 4(a), 7 U.S.C. 6(a) (prohibiting the off-exchange trading of futures transactions unless the transaction is conducted on or subject to the rules of a DCM, subject to certain exceptions).

180.  CEA 4(b), 7 U.S.C. 6(b) (permitting foreign boards of trade registered with the Commission with the ability to provide direct access to U.S. persons).

181.  CEA 4b, 7 U.S.C. 6b (prohibiting fraudulent conduct in connection with any contract of sale of any commodity in interstate commerce, among other things).

182.  CEA 4(a), 7 U.S.C. 6(a).

183.   Curran, 456 U.S., at 356 (1982). Commenters concur. For example, one commenter, Bitnomial Exchange, LLC (“Bitnomial”), explained that the provision “requires that any leveraged retail commodity transaction involving actual delivery after 28 days be regulated as a futures contract and occur on a DCM.” Letter from James Walsh, Chief Regulatory Officer, on behalf of Bitnomial Exchange, LLC, to Commissioners of the CFTC (Aug. 19, 2025) at 1 (“Bitnomial Letter”).

184.   See CEA 5(d), 7 U.S.C. 7(d); see also17 CFR part 38.

185.  CEA 5(d)(3), 7 U.S.C. 7(d)(3).

186.  CEA 5(d)(4), 7 U.S.C. 7(d)(4).

187.  CEA 5(d)(6), 7 U.S.C. 7(d)(6).

188.  CEA 5(d)(7), (8), 7 U.S.C. 7(d)(7), (8).

189.  CEA 5(d)(9), 7 U.S.C. 7(d)(9).

190.  CEA 5(d)(11), 7 U.S.C. 7(d)(11).

191.  CEA 5(d)(12), 7 U.S.C. 7(d)(12).

192.  CEA 5(d)(16), 7 U.S.C. 7(d)(16).

193.  CEA 5(d)(18), 7 U.S.C. 7(d)(18).

194.  CEA 1a(28)(A), 7 U.S.C. 1a(28)(A) (providing that the term “futures commission merchant” means an individual, association, partnership, corporation, or trust (i) that—(I) is—(aa) engaged in soliciting or in accepting orders for— [. . .] (DD) any agreement, contract, or transaction described in [. . .] section 2(c)(2)(D)(i) of this title; and (II) in or in connection with the activities described in items (aa) or (bb) of subclause (I), accepts any money, securities, or property (or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result therefrom[.]”).

195.  17 CFR 1.55.

196.  CEA 4f(b), 7 U.S.C. 6f(b).

197.  CEA 4d(a)(2), 7 U.S.C. 6d(a)(2).

198.  A registered DCO is subject to 18 core principles set out in section 5b(c)(2) of the Act. See Johnson et al., supra note 2, § 6.06. (“The core principles cover areas ranging from clearing member eligibility standards, risk management, default procedures, treatment of funds, rule enforcement, and legal risk. A DCO must comply with the DCO core principles and the requirements of any rule the CFTC may impose pursuant to its general rulemaking authority [. . .] The Commission's primary rules governing DCOs are set in [17 CFR 39].”).

199.   See Johnson et al., supra note 2, § 4.05 (“Where the CEA is found by a court to preempt state law, it is predicated on the doctrine of conflict preemption, under a case-by-case analysis. Courts have found that a state law conflicts with and is thus preempted by the CEA `[w]hen application of state law would directly affect trading on or operation of a futures market, it would stand “as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,” and is hence preempted.' ”) (quoting American Agric. Movement, 977 F.2d at 1156.

200.   American Agric. Movement, 977 F.2d at 1156. In contrast to the operation of a DCM, the Commission recognizes that “there is no need for uniformity when it comes to the rules that govern” certain other aspects of the commodity derivatives markets, including, for example, the “principal-agent relationships between brokers and investors. [. . .] [T]he possibility that different states would impose dissimilar fiduciary duties upon brokers might affect those private relationships, but would not appreciably hamper the efficient operation” of the markets and transactions subject to Commission jurisdiction. Id.

201.   Id.; Commodity Futures Trading Act of 1974: Hearings Before the S. Comm. on Agric. & Forestry on S. 2485, S. 2578, S. 2837, H.R. 13113, 93d Cong., 2d Sess. 685 (1974) (statement of Sen. Clark).

202.  H.R. Rep. No. 93-975, at 28 (1974).

203.   Zelener Hearing, supra note 53, at 25 (statement of Rep. Marshall); cf. Zelener Hearing, supra note 53, at 11 (statement of Philip A. Feigin, on behalf of Monex Deposit Company). One witness arguing on behalf of the Monex Deposit Company that state-by-state regulation of leveraged commodity transactions represented a better way to protect retail consumers than the contemplated federal regime. In 2019, the Monex Deposit Company was a codefendant in Monex, a Commission action prosecuting the fraudulent deception of retail customers in offering leveraged commodity transactions while evading the on-exchange requirement of section 2(c)(2)(D). See generally Monex, 931 F.3d.

204.   See, e.g., Money Transmission Modernization Act (“MTMA”), supra note 31, § 3.01(i), (j) (providing that the MTMA does not apply to a board of trade designated as a contract market under the Act or “a registered [FCM] under the [F]ederal commodities laws to the extent of its operation as such a merchant”). 31 states have enacted the MTMA in whole or in part. Conference of State Bank Supervisors, CSBS Money Transmission Modernization Act (MTMA) (Feb. 26, 2026), available at www.csbs.org/​csbs-money-transmission-modernization-act-mtma.

205.   See Application of FinCEN's Regulations to Certain Business Models Involving Convertible Virtual Currencies, supra note 24.

206.   See CEA 2(c)(2)(D)(iii), 7 U.S.C. 2(c)(2)(D)(iii); CEA 4(a), 7 U.S.C. 6(a).

207.   See CEA 1a(28)(A), 7 U.S.C. 1a(28)(A).

208.  See supra note 57 (statement of Sen. Lincoln, explaining the rationale for the legislation during floor debate on the Dodd-Frank Act).

209.   See Johnson et al., supra note 2, § 4.02 (“The Commission's principal regulatory tool is the promulgation of regulations governing the conduct of those over whom it has jurisdiction. Although enforcement actions [ ] contribute to the development of standards for derivatives and related activity, the most pervasive manifestation of the Commission's influence is the exercise of its general and specialized rulemaking powers under the Act. From its inception in 1975, the CFTC has had broad rulemaking authority. Pursuant to that authority, it has adopted a variety of rules to implement the provisions of the CEA applicable to the futures industry and markets.”).

210.   See, e.g., Mersinger Ooki Statement, supra note 98.

211.   See Coinbase Letter, supra note 19, at 2 (stating that “crypto asset markets have several key differences from futures markets”); see also Letter from Kraken to Christopher J. Kirkpatrick, Sec'y, CFTC, at 3 (Aug. 18, 2025) (“[A]s the Commission considers the applicability of its existing authority and potential rulemakings and guidance to industry, Kraken encourages the staff to work with industry stakeholders.”).

212.  Samuel Bankman-Fried co-founded Alameda Research LLC (“Alameda”), a crypto asset trading and investment firm, in 2017. In May 2019, he and others launched FTX Trading and various subsidiaries, affiliates, and related entities, collectively doing business as “ FTX.com ” or simply “FTX,” a centralized digital asset exchange. See Declaration of John J. Ray III In Support of Chapter 11 Petitions and First Day Pleadings, Case No. 22-11068 (JTD) (Bankr. D. Del Nov. 17, 2022). Bankman-Fried also operated LedgerX LLC (d/b/a FTX US Derivatives) (“LedgerX”) to offer futures, options, and swaps contracts pursuant to its registration with the CFTC as a DCM and DCO. See Chairman Rostin Behnam, Testimony Before the U.S. Senate Committee on Agriculture, Nutrition, and Forestry: Why Congress Needs to Act: Lessons Learned from the FTX Collapse (Dec. 1, 2022), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​opabehnam29 (“Behnam 2022 FTX Senate Testimony”). This Notice collectively refers to Alameda, FTX Trading, FTX.com, FTX US, and each of their affiliates, as “FTX”.

213.  CEA 3(a), 7 U.S.C. 5(a); see also supra notes 17, 45, 51 (examples of breakdowns in customer protection in crypto asset markets).

214.   Zelener Hearing, supra note 53, at 9, 18 (statements of Rep. Leonard L. Boswell, Chairman, and Daniel Roth, President of the National Futures Association).

215.   See, e.g., Zelener Hearing, supra note 53, at 18 (statement of Daniel Roth, President of the National Futures Association, providing that “[w]e have seen the migration of abusive practices away from the foreign currency trade to the unregulated, right now it is precious metals, tomorrow it might be something else. But we have seen these [websites], 30 of them, that have this unregulated; futures market even though they call it something else. So the point that I made earlier was that anti-fraud authority is not enough. The whole point of the [Act] is that retail customers need regulatory protection when they are trading futures contracts, and that goes beyond anti-fraud authority. We are trying to prevent the fraud, not just prosecute it.”).

216.   See supra note 107 (former Commissioner Johnson describing how the Commission's approach has left vulnerable retail customers exposed and lacking long-established customer protections available in other asset classes).

217.   See Chairman Rostin Behnam, Testimony Before the U.S. Senate Committee on Agriculture, Nutrition, and Forestry (Feb. 9, 2022), available at www.agriculture.senate.gov/​imo/​media/​doc/​Testimony_​Behnam_​020920225.pdf (“According to public data, every month in 2021 except one saw over $1 trillion in monthly trading volume in the digital asset cash market, with a high of $2.23 trillion in trading volume in May 2021.”).

218.  Behnam 2022 FTX Senate Testimony, supra note 212.

219.   Id.

220.   Id.

221.   See Chairman Rostin Behnam, Testimony Before the Subcommittee on Financial Services and General Government, Committee on Appropriations, U.S. Senate (June 13, 2024), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​opabehnam47 (“Behnam 2024 Appropriations Testimony”).

222.   See generally Section I.B.2, supra (providing a history of the Commission's enforcement actions in the crypto asset markets during this period); see also CFTC, CFTC Charges Binance and Its Founder, Changpeng Zhao, with Willful Evasion of Federal Law and Operating an Illegal Digital Asset Derivatives Exchange, Release No. 8680-23 (Mar. 27, 2023), available at www.cftc.gov/​PressRoom/​PressReleases/​8680-23 (Former CFTC's Enforcement Division Principal Deputy Director and Chief Counsel providing that the enforcement action “reflects that the CFTC and its Enforcement Division will pursue those [crypto] asset platforms and individuals who flout and actively attempt to circumvent CFTC regulatory requirements[;]” CFTC, CFTC Charges Alexander Mashinsky and Celsius Network, LLC with Fraud and Material Misrepresentations in Massive Commodity Pool Scheme Involving Digital Asset Commodities, Release No. 8749-23 (July 13, 2023), available at www.cftc.gov/​PressRoom/​PressReleases/​8749-23 (Commission enforcement action alleging that defendants falsely touted high profits and security to induce customers to deposit their digital asset commodities on the platform).

223.   See Behnam 2024 Appropriations Testimony, supra note 221; see also Mersinger Uniswap Statement, supra note 105 (“Additionally, if we continue with this enforcement-first approach, one or several DeFi protocols we target may choose to litigate rather than settle out of court. Facing litigation in these cases will not only come at the cost of expending substantial government (and private sector) resources, but also risks a morass of court cases yielding mixed results and conflicting conclusions.”).

224.   See CEA 3(a), 7 U.S.C. 5(a) (finding that the management and assumption of price risks, discovery of prices, and disseminating pricing information through trading in liquid, fair and financially secure trading facilities as affected with a national public interest).

225.   See, e.g., Peter Van Valkenburgh, Testimony to the Committee on Energy and Commerce, U.S. House of Representatives (June 6, 2017) (“The most exciting aspect of open blockchain networks is that they are entirely open for experimentation. They are permissionless. There is no patent or copyright to license, no university or corporation from which to seek a job, no exclusive membership fee to pay. Anyone with a computer and an internet connection can develop and share her own currency, her own financial contracts and strategies, her own vision of the future.”); Rebecca Lewis, John McPartland, and Rajeev Ranjan, Fed. Res. Bank of Chicago, Blockchain and Financial Market Innovation (June 2017) (“The chief advantage of a permissionless network is that it does not require a central authority to confirm or deny specific transactions; individuals who do not trust one another or any single central authority can transact on the permissionless network, trusting the consensus mechanism, which we discuss below, to ensure the ledger's accuracy.”).

226.   See Nakamoto, supra note 35.

227.  Chairman Michael S. Selig, CFTC, America's Financial Markets are Ready for a Golden Age (Jan. 20, 2026), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​seligstatement012026.

228.  Chairman Selig Project Crypto Remarks, supra note 125.

229.  Donald J. Trump, Keynote Address at the Bitcoin 2024 Conference, Nashville, Tenn. (July 27, 2024).

230.  Giancarlo Blockchain Summit Remarks, supra note 132.

231.   Id.

232.  The proposed Regulation CAM is discussed in Section V, infra, and contemplates the implementation of a fit-for-purpose regulatory framework that addresses the on-exchange requirement in the context of the commercial realities of, and risks posed by, CTXs.

233.  Chairman Selig Project Crypto Remarks, supra note 125 (discussing how onchain tools could be used to facilitate the programmatic monitoring of risks in real time and thereby “fulfill the original promise of blockchain technologies: a more open, transparent, and efficient market infrastructure.”).

234.   See Chris Dixon, I wrote a book: Read Write Own (June 22, 2023), available at cdixon.org/​2023/​06/​22/​read-write-own/​ (stating that “blockchains and the software movement around them [. . .] provide the only plausible path to sustaining the original vision of the internet as an open platform that incentivizes creativity and entrepreneurship.”); see also Miles Jennings, Decentralization is why we fight for crypto (Dec. 17, 2024), available at a16zcrypto.com/​posts/​article/​decentralization-fight-for-crypto/​.

235.   See Miles Jennings, Defining decentralization: It comes down to control, a16z crypto (Feb. 13, 2025), a16zcrypto.com/​posts/​article/​defining-decentralization-control/​ (“This amelioration of trust dependencies with respect to a blockchain network and its crypto asset [ ] is made possible by the fact that such systems are capable of decentralization—operation absent human intervention and control.”).

236.   See Aztec Foundation, Token Regulatory Characterisation Report (Nov. 13, 2025), available at aztec.network/​token-regulatory-report (describing how the AZTEC crypto asset (“AZTEC”) is a “necessary component” of the programmatic and permissionless operation of the blockchain system to which AZTEC relates because of the right AZTEC confers on its holders to “fully control the governance and operation” of that blockchain system.).

237.  CEA 3(a), 7 U.S.C. 5(a).

238.   See SEC, Fuse Crypto Limited, No-Action Letter (Nov. 24, 2025), available at www.sec.gov/​rules-regulations/​no-action-interpretive-exemptive-letters/​division-corporation-finance-no-action/​fuse-crypto-limited-112425 (“Fuse is a vertically integrated energy technology group focused on accelerating the decentralization of electricity grids, optimizing energy delivery, and empowering consumers to lower their electricity related costs. Through its operations in the United States[ ], Fuse endeavors to deliver tools that enable households and businesses to actively participate in the energy system—improving grid resilience, reducing congestion, and unlocking new forms of distributed value for consumers[ ].”).

239.   See Union Square Ventures, Our Investment in Glow Protocol: DePIN at the Edge of Energy Markets (Oct. 31, 2024), available at blog.usv.com/​our-investment-in-glow-protocol-depin-at-the-edge-of-energy-markets (“Glow's approach is radically different from existing subsidy systems for green energy, drawing inspiration from Bitcoin's open and highly competitive incentive model.”).

240.   See Circle, A new paradigm for blockchain & international aid, available at www.circle.com/​circle-impact (“Rumee Singh founded Rahat in 2020 to address the financial inclusion gap in her native Nepal and to channel humanitarian aid to people around the world. Rahat uses blockchain technology with smart contracts for fast, accurate aid payouts directly to beneficiaries' phones. Their use of parametric data automatically triggers early warning messages and targeted disbursements before disasters strike, even in low-tech environments.”).

241.   See Center for a Digital Future, Nouns DAO: Problem Addressed and Project Description (Apr. 2024), available at www.centerforadigitalfuture.org/​blog/​60kqfdgb4f8kljqy1j4ujvaqr1bx5y-364pg-bskhw-4zy2x (“Nouns DAO members who hold Nouns NFTs create and vote on proposals which guide the direction of the organization and allocate the funds in the [DAO] treasury. Funded initiatives include charitable donations to organizations like Coral Restoration Foundation, Freedom of the Press Foundation, and the Rainforest Foundation.”).

242.   See ConstitutionDAO, A Historic Attempt to Buy the U.S. Constitution Together, available at constitutiondao.org/​ (“ConstitutionDAO was a groundbreaking decentralized initiative that united thousands of [crypto asset] enthusiasts to bid on an original copy of the U.S. Constitution. Powered by community collaboration and blockchain transparency, it showcased the potential of decentralized governance and collective action in the Web3 era.”).

243.   See LinksDAO, Building the Golf Club for the Modern Era, available at www.linksdao.io/​ (“We are a global community of passionate golfers reimagining what it means to be a golf club. LinksDAO owns two golf courses on two continents that are being transformed into world-class venues.”).

244.   See Chairman Selig Project Crypto Remarks, supra note 125.

245.  CEA 3(a)-(b), 7 U.S.C. 5(a)-(b).

246.  Indeed, Chairman Selig recently acknowledged this dynamic when he noted that “[a]ccess to computing power is at the center of the growing artificial intelligence economy and critical to America winning the AI race. The CFTC will continue to act to ensure access to this critical commodity by improving the financial market for compute.” CFTC, CFTC Requests Comment on the Listing of Compute Derivatives Contracts, Release No. 9286-26 (Aug. 19, 2026), available at www.cftc.gov/​PressRoom/​PressReleases/​9286-26; see also Proposal To Exempt Certain Transactions Involving Not-for-Profit Electric Utilities,77 FR 164 (Aug. 23, 2012) (the Commission proposing bespoke regulatory treatment of certain derivatives referencing electric energy based on the unique physical properties of the underlying commodity); Giancarlo Blockchain Summit Remarks, supra note 132 (Chairman Giancarlo describing how “[w]ith respect to the bitcoin products, because they were novel and based on a unique crypto-asset, the exchanges did engage in substantial prior discussions with CFTC staff before launch; this allowed for incorporation of risk mitigating elements, including around higher margin requirements and contract sizes.”).

247.   See, e.g., House Conf. Report No. 102-978, 1992 U.S.C.C.A.N. 3179, 3213 (Congress noting that the Commission's exemptive authority under the section 4(c) of the Act is intended “to give the Commission a means of providing certainty and stability to existing and emerging markets so that financial innovation and market development can proceed in an effective and competitive manner.”).

248.   See CEA 4(c)(1), 7 U.S.C. 6(c)(1).

249.   See 15 U.S.C. 8321(a).

250.   See CEA 5(d)(5), 7 U.S.C. 7(d)(5).

251.   See, e.g., Section I.B.2, supra; Commissioner Summer K. Mersinger, Dissenting Statement Regarding Enforcement Actions Against: (1) Opyn, Inc.; (2) Deridex, Inc.; and (3) ZeroEx, Inc. (Sept. 7, 2023), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​mersingerstatement090723.

252.   See Mersinger Ooki Statement, supra note 98 (describing how the Commission has failed its statutory mandate to promote the responsible innovation and fair competition made possible by a “world of [crypto] assets, blockchain technology, and decentralized autonomous organizations (DAOs)—technology that did not exist when the [Act] was enacted in 1974, and that has just started to develop since Congress last amended the statute as part of the Dodd-Frank Act in 2010.”).

253.   Board of Trade of Chicago v. Olsen 262 US, at 41 (1923) (“The Chicago Board of Trade is engaged in a business affected with a public national interest and is subject to national regulation as such.”).

254.   American Agric. Movement, 977 F.2d at 1156 (“Only in the context of market regulation does the need arise for uniform legal rules. As Congress recognized in enacting the 1974 Act, a contract market could not operate efficiently, and perhaps not at all, if varying and potentially contradictory legal standards governed its duties to investors[.]”).

255.  Mersinger Ooki Statement, supra note 98.

256.   SEC v. Chenery Corp., 332 U.S. 194, 202-03 (1947) (“In other words, problems may arise in a case which the administrative agency could not reasonably foresee, problems which must be solved despite the absence of a relevant general rule. Or the agency may not have had sufficient experience with a particular problem to warrant rigidifying its tentative judgment into a hard and fast rule. [. . .] In those situations, the agency must retain power to deal with the problems on a case-to-case basis if the administrative process is to be effective.”).

257.   See Behnam 2024 Appropriations Testimony, supra note 221 (“Nowhere have we been more active than in the [crypto asset] space. [. . .] With many agency resources which are not considered in our budget appropriation being allocated to an unregulated market, I fear the current trajectory is unsustainable. Namely, we will continue to see rampant fraud and manipulation in the [crypto asset] market that will hurt American customers, and possibly infect the traditional financial markets.”); see also Mersinger Uniswap Statement, supra note 105 (“Additionally, if we continue with this enforcement-first approach, one or several DeFi protocols we target may choose to litigate rather than settle out of court. Facing litigation in these cases will not only come at the cost of expending substantial government (and private sector) resources, but also risks a morass of court cases yielding mixed results and conflicting conclusions.”).

258.  Mersinger Ooki Statement, supra note 98.

259.   Id.

260.  Chairman Selig Project Crypto Remarks, supra note 125.

261.   Id; see also CEA 5(b), 7 U.S.C. 5(b) (stating that the purposes of the CEA include the promotion of fair competition among boards of trade, other markets and market participants) (emphasis added).

262.   See, e.g., Mersinger Ooki Statement, supra note 98.

263.   See CEA 2(c)(2)(D)(i), 7 U.S.C. 2(c)(2)(D)(i) (“Except as provided in clause (ii), this subparagraph shall apply to any agreement, contract, or transaction in any commodity that is [. . .] entered into, or offered (even if not entered into), on a leveraged or margined basis, or financed by the offeror, the counterparty, or a person acting in concert with the offeror or counterparty on a similar basis.”).

264.   See 15 U.S.C. 8321(a), providing that the “Commission may adopt a rule to define [ ] (1) the term `commercial risk'; and (2) any other term included in an amendment to the [CEA] made by [the Dodd-Frank Act].”

265.  CEA 2(c)(2)(D)(i), 7 U.S.C. 2(c)(2)(D)(i).

266.  CEA 2(c)(2)(D)(ii)(III)(aa), 7 U.S.C. 2(c)(2)(D)(ii)(III)(aa).

267.   See Section III.B, supra;see also Monex, 931 F.3d 966.

268.   See Monex 931 F.3d, at 974.

269.   See, e.g., SEC v. Coinbase, 726 F. Supp. 3d 260, 271 (S.D.N.Y. Mar. 27, 2024) (explaining that “[c]ritically important to a [crypto asset] owner's exercise of control over her [crypto assets] are the `public key' and `private key' associated with a crypto asset, which keys permit the user to effectuate transactions on the associated blockchain. Owners typically store these keys on a piece of hardware or software known as a `crypto wallet.' The wallets, in turn, use both a public key and a private key. The public key is colloquially known as the user's blockchain `address' and can be freely shared with others. The private key is analogous to a password and confers the ability to transfer a [crypto asset].”).

270.   See generally POSA Liquid Staking Paper, supra note 67; see also U.S. Securities and Exchange Commission, Statement on Certain Protocol Staking Activities (May 29, 2025), available at www.sec.gov/​newsroom/​speeches-statements/​statement-certain-protocol-staking-activities-052925.

271.  CEA 2(c)(2)(D)(ii)(III)(bb), 7 U.S.C. 2(c)(2)(D)(ii)(III)(bb).

272.  CEA 2(c)(2)(D)(ii)(III)(aa), 7 U.S.C. 2(c)(2)(D)(ii)(III)(aa).

273.   See CEA 2(c)(2)(D)(i), 7 U.S.C. 2(c)(2)(D)(i) (“ Except as provided in clause (ii), this subparagraph shall apply to any agreement, contract, or transaction in any commodity that is . . .”) (emphasis added).

274.  This Notice provides the Commission's preliminary interpretation of the term “actual delivery” solely as it is used in CEA 2(c)(2)(D) and in the context of CTXs. It does not address, and the Commission does not express any view regarding, (i) the means by which delivery may be effected within the context of the Federal securities laws, including with respect to book-entry arrangements involving securities held through SEC-registered intermediaries such as broker-dealers and clearing agencies, or (ii) the meaning of the term “delivery” as it is used within the Federal securities laws, including with respect to the “clearing agency” definition set forth in 15 U.S.C. 78c(a)(23) (providing that the term “clearing agency” means “any person who [ ] (i) acts as a custodian of securities in connection with a system for the central handling of securities whereby all securities of a particular class or series of any issuer deposited within the system are treated as fungible and may be transferred, loaned, or pledged by bookkeeping entry without physical delivery of securities certificates, or (ii) otherwise permits or facilitates the settlement of securities transactions or the hypothecation or lending of securities without physical delivery of securities certificates[.]”) (emphasis added).

275.  CEA 2(c)(2)(D)(i)-(ii), 7 U.S.C. 2(c)(2)(D)(i)-(ii).

276.   Monex, at 14 (emphasis added).

277.   See Z elener, 373 F.3d at 868-69.

278.   Id.

279.  The Commission notes that following the actual delivery of a crypto asset purchased pursuant to a CTX, the transaction is excepted from section 2(c)(2)(D)(i), and the Commission no longer has jurisdiction with respect to such asset, aside from its anti-fraud and anti-manipulation authority.

280.   See SEC Commissioner Hester M. Peirce, Headstands and Summervaults: A Statement on Crypto Vaults and Lending Strategies (July 22, 2026), available at www.sec.gov/​newsroom/​speeches-statements/​peirce-statement-crypto-vaults-lending-strategies-072226. Vaults facilitate asset deployment by using smart contracts to allocate user assets to various yield-generating activities, including staking and lending. Vaults have attracted recent attention as a tool for facilitating disintermediated credit and leverage arrangements.

281.  The Commission notes its preliminary understanding that crypto assets purchased through onchain trading protocols are typically delivered directly to the purchaser's digital wallet, as opposed to an account or custodial relationship with an intermediary via an internal book-entry. See U.S. Department of the Treasury, Illicit Finance Risk Assessment of Decentralized Finance at 6, n.15, 28 (Apr. 2023), available at home.treasury.gov/​system/​files/​136/​DeFi-Risk-Full-Review.pdf.

282.   Monex, at 15 (“even if the commodity serves as collateral, there is no reason why the buyer cannot control it [pursuant to actual delivery thereof]. In many financing contexts, some degree of buyer possession or control is commonplace.”). For example, the Commission preliminarily understands that certain onchain transactions may result in actual delivery despite a lien or security interest in the purchased assets remaining outstanding, such as where the rules of an onchain protocol provide for the free use in commerce of a crypto asset purchased on a margined basis, subject to the purchased crypto asset, or collateral securing it, being liquidated and/or destroyed ( i.e., “burned”) if the margin collateral securing the purchase falls below a certain threshold.

283.   See generally POSA Liquid Staking Paper, supra note 67; see also U.S. Securities and Exchange Commission, Statement on Certain Protocol Staking Activities (May 29, 2025), available at www.sec.gov/​newsroom/​speeches-statements/​statement-certain-protocol-staking-activities-052925.

284.  Coinbase Letter, supra note 19, at 2.

285.   See, e.g.,Conflicts and Affiliations,91 FR 50926, 50927 (Aug. 6, 2026) (“Conflicts and Affiliations NPRM”), providing that the “Commission preliminarily believes that [an affiliated] market structure [in which a DCM and DCO share common ownership] may provide benefits to the derivatives markets and market participants. In this regard, the Commission believes that facilitating market structure innovation and competition, subject to appropriate safeguards, advances the Commission's mission of promoting the integrity, resilience, and vibrancy of the U.S. derivatives markets.” The Conflicts and Affiliations NPRM also discusses conflicts of interest that may arise in connection with integrated structures, as well as the contemplated establishment of additional regulatory obligations that are intended to mitigate related risks. See generally Conflicts and Affiliations NPRM.

286.   See generally CEA 5(d), 7 U.S.C. 7(d). There are 23 statutory Core Principles for DCMs.

287.  The CAM Core Principles are discussed further in Section V.B, infra.

288.  CEA 4(a), 7 U.S.C. 6(a).

289.  The Commission preliminarily believes that such market participants, who may have invested significantly to comply with the current regulatory structure, should have the opportunity to do so without undue costs from additional compliance obligations stemming from the CAM Proposal.

290.   See CEA 1a(28)(A), 7 U.S.C. 1a(28)(A), supra note 194 (providing that the term “futures commission merchant” means an individual, association, partnership, corporation, or trust (i) that—(I) is—(aa) engaged in soliciting or in accepting orders for— [. . .] (DD) any agreement, contract, or transaction described in [. . .] section 2(c)(2)(D)(i) of this title; and (II) in or in connection with the activities described in items (aa) or (bb) of subclause (I), accepts any money, securities, or property (or extends credit in lieu thereof) to margin, guarantee, or secure any trades or contracts that result or may result therefrom[.]”).

291.   See, e.g., Enhancing Protections Afforded Customers and Customer Funds Held by Futures Commission Merchants and Derivatives Clearing Organizations,77 FR 67866 (Nov. 14, 2012) (“The protection of customers—and the safeguarding of money, securities or other property deposited by customers with an FCM—is a fundamental component of the Commission's disclosure and financial responsibility framework.”). Requiring FCM intermediation of CTXs also ensures that customer-facing activity on a CAM would be subject to the Bank Secrecy Act's (“BSA”) applicable anti-money laundering, customer identification, and suspicious activity reporting requirements, among other related legal and regulatory obligations that the BSA and Commission regulations impose on FCMs. See, e.g.,17 CFR 42.2. These legal and regulatory obligations support the detection and prevention of money laundering and other illicit financial activity, facilitate regulatory oversight of such FCMs' compliance controls, and require the provision of relevant information to law enforcement authorities. See Protection of Clearing Member Funds Held by Derivatives Clearing Organizations, 89 FR 286, 304-306; Commissioner Christy Goldsmith Romero, Dissenting Statement on Rushed Rulemaking Related to FTX's Direct-to-Retail Market Structure (Dec. 18, 2023), available at www.cftc.gov/​PressRoom/​SpeechesTestimony/​romerostatement121823c.

292.  Coinbase Letter, supra note 19, at 2.

293.  As used herein, the Commission preliminarily understands the term “qualified banking institution” to mean a depository institution, as defined in 12 U.S.C. 1813(b).

294.  In order to make a leverage arrangement available to retail customers of a CAM, an FCM would be required to comply with regulations promulgated in conjunction with the CAM Proposal and pertaining to customer protection issues specifically applicable to the administration of a leverage arrangement and any extension of financing made thereunder, including around customer disclosures, initial margin and maintenance margin, and liquidation procedures.

295.   Id.

296.   See Coinbase Letter supra note 19 (stating that “crypto asset markets have several key differences from futures markets”); see also Letter from Kraken to Christopher J. Kirkpatrick, Sec'y, CFTC, at 3 (Aug. 18, 2025) (“as the Commission considers the applicability of its existing authority and potential rulemakings and guidance to industry, Kraken encourages the staff to work with industry stakeholders to study the unique technical aspects of operating a spot digital asset exchange.”).

297.  Unlike a typical futures contract listed on a DCM, the asset listed for trading on a CAM is a commodity itself ( i.e., a crypto asset) rather than a contract that settles by reference to that commodity.

298.   See supra Sections IV.B and IV.C for further discussion of the actual delivery exception.

299.  This Notice provides additional information and specific requests for comment pertaining to an FCM's custody of customer funds in Section V.E, infra, including with respect to the type of account in which such assets are held ( e.g., a Section 4d-compliant segregated account or a delivery account).

300.  The Commission notes that the applicable leverage provider ( i.e., the customer's creditor) cannot, under the current FCM regulatory framework promulgated under the Act, have a security interest in the assets in an FCM's segregated account.

301.  For example, a sponsored qualified banking institution may have the power to direct the FCM (on behalf of the customer) to liquidate the leveraged position under such circumstances.

302.   See generally CEA 5(d), 7 U.S.C. 7(d). There are 23 statutory Core Principles for DCMs.

303.  CEA 5(d)(1)(A), 7 U.S.C. 7(d)(1)(A); 17 CFR part 38.

304.   See, e.g., Requirements for Derivatives Clearing Organizations, Designated Contract Markets, and Swap Execution Facilities Regarding the Mitigation of Conflicts of Interest, supra note 46, 75 FR at 63736 (“[T]herefore, although each DCM[ ] is a commercial enterprise, the fact that each entity has self-regulatory obligations means that each entity is not simply a corporation, but a corporation charged with the public trust.”).

305.  CEA 5(d)(3), 7 U.S.C. 7(d)(3); see also17 CFR 38.200 through 38.201.

306.  CEA 5c(c)(1), 7 U.S.C. 7a-2(c)(1); see also17 CFR 40.2.

307.  CEA 5c(c)(4) through (5), 7 U.S.C. 7a-2(c)(4) through (5); see also17 CFR 40.3.

308.   See generally17 CFR 40.2 and 40.3. Amendments to contract terms and conditions also must be submitted to the Commission in accordance with procedures set forth at CEA 5c(c), 7 U.S.C. 7a-2(c), and part 40 of the Commission's regulations.

309.   Id.

310.   See Core Principles and Other Requirements for Designated Contract Markets,77 FR 36612 at 36632 (June 19, 2012).

311.   See, e.g., a16z Letter, supra note 135.

312.   Cf. Regulation Crypto Assets, supra note 153.

313.  a16z Letter, supra note 135, at 6, 7.

314.  CEA 5(d)(4), 7 U.S.C. 7(d)(4).

315.  OKX Letter, supra note 123, at 4.

316.  17 CFR part 38, appendix B (the “Appendix B Guidance”).

317.   See 17 CFR part 38, appendix B. Guidance set forth in the Appendix B Guidance states that a DCM may use the Appendix C Guidance as guidance in meeting DCM Core Principle 3 for both new product listings and existing listed contracts.

318.  CEA 5(d)(5), 7 U.S.C. 7(d)(5).

319.  CEA 5(d)(10), 7 U.S.C. 7(d)(10).

320.  CEA 5(d)(8), 7 U.S.C. 7(d)(8).

321.  CEA 5(d)(18), 7 U.S.C. 7(d)(18).

322.  CEA 5(d)(8), 7 U.S.C. 7(d)(8).

323.  CEA 5(d)(10), 7 U.S.C. 7(d)(10).

324.  For example, onchain records of settlement of transactions may be immutably stored on the relevant public blockchain in a manner that protects against alteration or loss, and such records may be retained indefinitely by the nature of blockchain technology. Those records may also be publicly available in a manner that would obviate the need for a CAM to otherwise publish such information.

325.  OKX Letter, supra note 123, at 5.

326.  CEA 5(d)(9), 7 U.S.C. 7(d)(9).

327.   Id.

328.  CEA 5(d)(20), 7 U.S.C. 7(d)(20).

329.   See, e.g., OKX Letter, supra note 123, at 4-5.

330.  The term “validator” means a person who operates a node on a blockchain system and in the course of doing so is selected according to the programmatic rules of the blockchain system to validate new blocks of data to, and update the state of, the blockchain system. In exchange for providing validation services, validators earn “rewards” of two types: (1) newly minted (or created) crypto assets that are programmatically distributed to the validator by the blockchain system in accordance with its underlying software protocol; and (2) a percentage of the transaction fees, paid in crypto assets, by parties who are seeking to add their transactions to the blockchain system. See generally SEC, Statement on Certain Protocol Staking Activities, supra note 270.

331.  Rebecca Rettig, Omid Malekan & Michael Mosier, The Compatibility of Permissionless Networks and Financial Integrity: A Practical Guide for Financial Institutions (Aug. 24, 2026), available at papers.ssrn.com/​sol3/​papers.cfm?​abstract_​id=​7343938.

332.   See CEA 5(d)(7), 7 U.S.C. 7(d)(7) (providing in part that a board of trade shall make available to market authorities, market participants, and the public accurate information concerning the terms and conditions of the contracts of the contract market; and the rules, regulations, and mechanisms for executing transactions on or through the facilities of the contract market). Other relevant Commission regulations include, for example, self-certification of rule amendments under 17 CFR 40.6 or Commission approval pursuant to 17 CFR 40.5.

333.  CEA 5(d)(2), 7 U.S.C. 7(d)(2); see also17 CFR 38.152.

334.   See Coinbase Letter, supra note 19, at 5.

335.  Bitnomial Letter, supra note 183, at Part II.

336.   See Section V.B.1, supra.

337.  17 CFR 1.30 (providing that “futures customer funds” means all money, securities, and property received by a futures commission merchant or by a derivatives clearing organization from, for, or on behalf of, futures customers: (1) To margin, guarantee, or secure contracts for future delivery on or subject to the rules of a contract market or derivatives clearing organization, as the case may be, and all money accruing to such futures customers as the result of such contracts; and (2) In connection with a commodity option transaction on or subject to the rules of a contract market, or derivatives clearing organization, as the case may be: (i) To be used as a premium for the purchase of a commodity option transaction for a futures customer; (ii) As a premium payable to a futures customer; (iii) To guarantee or secure performance of a commodity option by a futures customer; or (iv) Representing accruals (including, for purchasers of a commodity option for which the full premium has been paid, the market value of such commodity option) to a futures customer. (3) Notwithstanding paragraphs (1) and (2) of this definition, the term futures customer funds shall exclude money, securities or property held to margin, guarantee or secure security futures products held in a securities account, and all money accruing as the result of such security futures products.).

338.  17 CFR 1.20.

339.  Bitnomial Letter, supra note 183, at Part II. “FCMs must segregate customer funds and comply with strict customer protection requirements under section 4d of the CEA.”

340.   See CEA 2(a)(1)(A), 7 U.S.C. 2(a)(1)(A) (providing that the “Commission shall have exclusive jurisdiction [. . .] with respect to accounts [. . .] involving swaps or contracts of sale of a commodity for future delivery (including significant price discovery contracts), traded or executed on a contract market designated pursuant to section 7 of this title.”).

341.  Bitnomial Letter, supra note 183, at Part III (“IBs complement this structure by soliciting customer orders and coordinating with FCMs to ensure proper execution of delivery instructions and compliance with regulatory requirements.”).

342.  17 CFR 1.73.

343.  17 CFR 1.17.

344.  CEA 5(d)(11), 7 U.S.C. 7(d)(11).

345.  CEA 5b(c)(2)(B)(ii)(I), 7 U.S.C. 7a-1(c)(2)(B)(ii)(I).

346.   See 17 CFR 39.11(a).

347.   See 11 U.S.C. 101(6), providing that a “commodity broker” is defined to include an FCM.

348.   See 11 U.S.C. 761(4)(F)(ii) (defining “commodity contract” to include “with respect to [an FCM] [. . .] any [. . .] contract, [. . .] or transaction [. . .] that is cleared by a” DCO).

349.  Subject to certain exceptions, the Act defines a derivatives clearing organization as a clearinghouse, clearing association, clearing corporation, or similar entity, facility, system, or organization that, with respect to an agreement, contract, or transaction—“(i) enables each party to the agreement, contract, or transaction to substitute, through novation or otherwise, the credit of the derivatives clearing organization for the credit of the parties; (ii) arranges or provides, on a multilateral basis, for the settlement or netting of obligations resulting from such agreements, contracts, or transactions executed by participants in the derivatives clearing organization; or (iii) otherwise provides clearing services or arrangements that mutualize or transfer among participants in the derivatives clearing organization the credit risk arising from such agreements, contracts, or transactions executed by the participants.” See CEA 1a(15), 7 U.S.C. 1a(15).

350.   See 11 U.S.C. 761(4)(F)(i).

351.   See American Agric. Movement, 977 F.2d, at 1156 (“Only in the context of market regulation does the need arise for uniform legal rules. As Congress recognized in enacting the 1974 [CEA], a contract market could not operate efficiently, and perhaps not at all, if varying and potentially contradictory legal standards governed its duties to investors (or farmers).”).

352.   Zelener Hearing, supra note 53, at 9 (statement of Daniel Roth, President of the National Futures Association).

353.   See Buterin, supra note 36 (describing smart contracts and onchain applications enabled by Turing-complete programming languages).

354.   Monex, at 15 (“Monex argues that in the context of a provision regulating leveraged commodity sales, it would make little sense for `actual delivery' to turn on possession or control, because such a reading would clash with `margin, which means `[c]ash or collateral required to be paid to a securities broker by an investor to protect the broker against losses from securities bought on credit.' Black's Law Dictionary (9th ed. 2009). Because the very meaning of the word `margin' requires that the buyer deposit collateral with the seller, actual delivery must mean something other than transferring possession or control to the buyer. Otherwise, Monex argues, margin would mean nothing. Yet, even if the commodity serves as collateral, there is no reason why the buyer cannot control it. In many financing contexts, some degree of buyer possession or control is commonplace. While permitting customers to obtain significant control over or possession of metals might be practically difficult here, that fact does not displace the statute's plain meaning.”).

355.   See supra note 124 and supra Section I.B.4 (describing historical and statutory frictions between the Commission and the SEC).

356.  CEA 1a(9), 7 U.S.C. 1a(9).