Part of that agenda includes a regulatory “crypto sprint,” where the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC) are exploring joint oversight of the sector and even 24/7 trading cycles that would bring Wall Street closer to crypto’s nonstop pace.
But despite those headline-grabbing initiatives, the CFTC’s latest advisory on the Foreign Board of Trade (FBOT) framework appears unlikely to convince offshore crypto exchanges to serve U.S. customers.
Eli Cohen, general counsel at tokenization platform Centrifuge, says the sticking point is simple: the FBOT regime was written for futures and commodities markets, not crypto-native platforms. Requirements around settlement, clearing, and regulatory licensing reflect the legacy system, and many exchanges that operate from places like Seychelles deliberately chose those jurisdictions to avoid such restrictions.
“The only firms that even qualify to apply are heavily regulated exchanges overseas,” Cohen explained, adding that most crypto platforms don’t have the home-country oversight needed to meet those standards.
Because of this, Cohen believes the advisory is more symbolic than practical. Offshore exchanges aren’t likely to overhaul their structures just to fit into a decades-old regulatory mold. For real change, he argues, Congress must pass a crypto market structure bill that gives the industry its own legal framework, rather than forcing it into boxes designed for other asset classes.
The FBOT clarification may give Washington talking points, but it does little to resolve the underlying problem: the absence of a comprehensive rulebook for digital assets. Until lawmakers codify clear, stable regulations, U.S. customers will continue flocking to offshore platforms — and those platforms will have little incentive to return.
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