The Commodity Futures Trading Commission (CFTC) is taking significant steps by retracting legacy policies pertaining to digital assets, representing a pivotal shift in its approach towards regulated cryptocurrency markets.

Acting CFTC Chairman Caroline D. Pham has announced the withdrawal of the agency’s longstanding guidance regarding the “actual delivery” of virtual currencies, a framework that has governed how firms could manage the custody and settlement of digital asset transactions since 2020.

This decision opens the door for new guidance that is more aligned with the emergence of tokenized markets, recent legislative advancements, and the CFTC’s expanding oversight of spot crypto trading.

Phạm articulated that “eliminating outdated and overly complex guidance that penalizes the crypto industry and stifles innovation is precisely what the Administration has committed to achieving this year.”

She further emphasized that this move illustrates the agency’s capacity to safeguard U.S. traders while fostering broader access to regulated markets.

The advisory that has been retracted delineated the conditions under which virtual currencies could be classified as “delivered” in retail commodity transactions. This framework was conceived during a time when the regulated infrastructure for digital assets was nascent and primarily focused on Bitcoin custody and settlement.

Since that time, Congress has enacted the GENIUS Act, the CFTC has initiated regulated spot trading, and tokenization has gained significant traction among major financial institutions. Consequently, staff now recognize the 2020 advisory as inconsistent with the current market landscape.

The retraction of this guidance also advances the CFTC’s initiative to implement recommendations from the President’s Working Group on Digital Asset Markets.

The CFTC’s Broader Crypto Policy Shift

This announcement follows a series of actions taken earlier in December aimed at consolidating crypto activities within federal jurisdiction.

Earlier this month, the agency launched a pilot program allowing Bitcoin and other cryptocurrencies to be used as collateral in regulated derivatives markets. This program stipulates comprehensive reporting and risk management requirements for futures commission merchants, along with updated guidelines on the integration of tokenized assets within the existing CFTC framework.

Under the pilot program, firms are required to submit weekly reports detailing the digital assets held in customer accounts and to inform regulators of any significant incidents related to tokenized collateral.

This structure provides the CFTC with enhanced visibility into operational and custody risks while firms explore the application of cryptocurrencies in margin accounts.

The agency has also issued a no-action position for futures commission merchants accepting non-securities digital assets, such as payment stablecoins, thereby clarifying applicable capital and segregation requirements. Concurrently, restrictions from 2020 limiting the use of digital assets as collateral have been rescinded.

CFTC’s Guidance on U.S. Spot Crypto Markets

Moreover, the CFTC has approved federally regulated spot trading for Bitcoin and other cryptocurrencies for the first time. Bitnomial, a U.S. derivatives platform, is set to begin offering spot, perpetual contracts, futures, and options on a single exchange under full CFTC supervision next week.

This exchange structure facilitates unified margin and net settlement across various product types, thereby reducing redundant collateral obligations for traders.

Pham noted that expanding spot trading under CFTC oversight provides U.S. traders with a secure alternative to offshore trading venues and fosters a regulatory environment where domestic firms can operate without the burdens of state-by-state inconsistency.

The agency’s focus extends beyond trading activities. Polymarket, a crypto-based prediction market, has received authorization to resume operations in the U.S. following enhancements to its compliance systems and acquisition of a registered platform.

The overarching aim articulated by the CFTC is to reinforce oversight of digital markets without impeding the adoption of innovative technologies.

In related developments, the CFTC has approved Gemini’s application for a Designated Contract Market license, thereby enabling the exchange to launch a prediction market and potentially expand its offerings into crypto futures, options, and perpetual swaps. Gemini had initially submitted its application in 2020, prior to the recent escalation in interest in prediction markets and platforms.

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