{"id":15776,"date":"2025-09-06T23:05:24","date_gmt":"2025-09-06T21:05:24","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=15776"},"modified":"2025-09-06T23:05:24","modified_gmt":"2025-09-06T21:05:24","slug":"offshore-crypto-exchanges-opt-out-of-fbot-framework-for-u-s-operations","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/09\/06\/offshore-crypto-exchanges-opt-out-of-fbot-framework-for-u-s-operations\/","title":{"rendered":"Offshore Crypto Exchanges Opt Out of FBOT Framework for U.S. Operations"},"content":{"rendered":"

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The recent Commodity Futures Trading Commission (CFTC) advisory concerning offshore exchanges catering to US residents under the Foreign Board of Trade (FBOT) structure will not bring offshore crypto exchanges back to the US, as stated by Eli Cohen, chief legal officer at real-world asset (RWA) tokenization firm Centrifuge.<\/p>\n

Cohen informed Cointelegraph that settlement, clearing, and other regulatory obligations designed for the conventional financial system, necessary to serve US clients under the FBOT framework<\/a>, are not customized for crypto exchanges and will be challenging or unfeasible to meet.\u00a0<\/p>\n

The CFTC\u2019s guidance<\/a> additionally indicated that only Licensed Futures Commission (FCM) exchanges, which act as broker-dealers for futures contracts, and other rigorously regulated entities, are eligible to apply under the FBOT framework, Cohen noted. He added:<\/p>\n

\u201cThe primary issue is that only regulated exchanges beyond the United States can apply for the FBOT. Thus, a regulatory framework must exist in your home country.\u201d\u00a0<\/p><\/blockquote>\n

CFTC staff guidance delineating qualifying criteria to register under the FBOT framework and cater to US residents. Source: <\/em>CFTC<\/em><\/a><\/figcaption><\/figure>\n

Numerous exchanges opt to establish operations in Seychelles or other unregulated territories to circumvent such a framework altogether, Cohen remarked.<\/p>\n

The optimal method to provide clarity for crypto exchanges is to enact a crypto market structure bill<\/a> in Congress, embedding crypto regulations into law, and creating enduring change that does not vary with administrations, Cohen asserted.<\/p>\n

Related: <\/strong><\/em>\u2018Too few guardrails,’ CFTC\u2019s Johnson cautions on prediction market hazards<\/strong><\/em><\/a><\/p>\n

CFTC\u2019s \u201ccrypto sprint\u201d promises clarity on regulations and a transformation of the financial system<\/h2>\n

The CFTC\u2019s \u201ccrypto sprint\u201d represents an initiative to revamp crypto regulations<\/a> to advance US president Donald Trump\u2019s objective of positioning the US as the worldwide leader in crypto.<\/p>\n

A number of policy suggestions were introduced in the Trump administration\u2019s crypto report<\/a>, published in July, which included granting the Securities and Exchange Commission (SEC) and the CFTC joint oversight over crypto<\/a>.<\/p>\n