US Goes Back to the Future on Crypto Trading
The CFTC’s decision to make it easier for global crypto platforms to accept US customers may open the door wider for US-based traders to access liquidity, but despite the hype it was a door that was already ajar.
The politicisation of commodity trading in the US was highlighted again in late August when the acting chair of the CFTC outlined the foreign board of trade (FBOT) registration framework for non-US entities looking to provide customers in the US with direct market access to their trading platforms.
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The move was described as providing the regulatory clarity needed to legally onshore trading activity that had been driven offshore due to the ‘regulation by enforcement’ approach of the past several years.
Caroline Pham, Source: CFTC
“American companies that were forced to set up shop in foreign jurisdictions to facilitate crypto asset trading now have a path back to US markets,” stated Caroline Pham. The FBOT registration framework applies to all asset classes.
Read more: CFTC to “Explore” Allowing MiCA-Authorized Platforms to Serve U.S. Markets
According to the CFTC, there has been confusion regarding whether non-US exchanges should register as an FBOT or a DCM (designated contract market, which is subject to the regulatory framework of the Commodity Exchange Act Section 5).
The more relaxed regulatory regime should make it easier for US-based exchanges to offer services such as perpetual futures trading, staking and leverage. But as one market participant observed, these entities will still be subject to CFTC jurisdiction.
Factors that will determine whether approval is granted include whether the platform’s home regulator is considered to apply standards equivalent to those in the US. This has long been the case for traditional futures exchanges, and it is now being made clear for cryptocurrency markets as well.
🚨NEW: In a recent speech, Acting CFTC Chair @CarolineDPham said the agency is exploring whether foreign crypto trading platforms that follow robust, crypto-specific rules, such as the EU’s MiCA framework, could be recognized under U.S. cross-border regulations.
It follows the… pic.twitter.com/ft1LAmpVrh
— Eleanor Terrett (@EleanorTerrett) September 9, 2025
The most common workaround for US retail traders has been to access overseas exchanges through a VPN. However, this is not a completely reliable mechanism, as many have had their accounts terminated or faced issues around the taxation of trading profits.
Institutional clients have more sophisticated options at their disposal – such as opening accounts through entities in offshore jurisdictions – but the US is keen to bring as much of this business as possible onshore.
What this means for market depth and spreads remains to be seen, but we can assume that the CFTC will step up its efforts to create a more crypto-friendly regulatory environment.
Exchanges Following European Commission Consolidation Consensus
With capital markets consolidation having been a key objective of the European Commission for the last decade, we can expect further amalgamation in the exchange space given the acquisitions and product moves seen over the past 12 months.
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set itself up as ‘one to watch’ with its acquisition of Aquis, which was completed in July and positioned the Swiss and Spanish financial centre infrastructure provider as the only exchange group providing listing venues in all major European financial centres, including Switzerland, the UK and the EU.
SIX now claims to have an aggregated European market share of 15% and has set its sights on increasing that to 20%.
However, the major mover in this space is undoubtedly Euronext, which has spent much of the last four years integrating Borsa Italiana Group into its business.
In July, the pan-European market infrastructure submitted an all-share voluntary exchange offer to the parent company of Greek financial infrastructure group ATHEX (Athens Stock Exchange).
In addition to geographic diversification, the company has highlighted potential synergies from integrating ATHEX onto Euronext’s trading platform and the new CSD platform currently in development, as well as integrating their clearing business.
Speaking at PostTrade 360 2025 in Stockholm earlier this month, Pierre Davoust, head of Euronext Securities, said clients would be able to manage four central European markets – France, the Netherlands, Belgium and Italy – in one CSD by September 2026.
The consolidation trend is also evident outside Europe, with the Canadian Securities Exchange acquiring the National Stock Exchange of Australia.
‘Kraken’ the Prop Trading Conundrum
Estimates of the value of the prop trading industry vary, with some observers reckoning it could be worth north of $20 billion on the back of challenge fees that can run from a few tens of dollars to several thousand.
Yet a seemingly simple business model has got the better of some experienced brokers through a combination of technology costs, the difficulty of acquiring and retaining customers, and traders buying fewer challenges.
So why has one of the world’s largest crypto platforms entered the prop market at a time when the sustainability of the business model has apparently never been more in question? The answer could lie in the parallels between crypto and prop trading.
Mayne came on the stream 3 months ago and I glazed him hard about breakout’s success and why its the only prop firm in crypto that is actually working.
He just sold it to Kraken (probs for 7-8 figs?). Legendary. CT Unc. https://t.co/NJ0iXC4N0Y pic.twitter.com/TVDaAcZKFS
— Andy (@ayyyeandy) September 4, 2025
Both disciplines have operated on the fringes of regulation, and crypto firms in particular have historically been relaxed about acquiring customers without having all their regulatory ducks in a row.
The irony of Kraken – which generated $1.5 billion in revenue in its last financial year – entering the prop space at a time when the dominant trend seems to be for firms to close their prop trading operations will not be lost on those who read the comments of Propel Capital’s CEO.
Read more: Kraken’s Breakout Bet Could Normalize Prop Trading Across the Crypto Industry
Propel CEO Mitchell Ali suggested that unsustainable industry practices were a key factor in the firm’s decision to shut down its prop business, with fees being driven down as firms look to boost their trading volumes. Others have complained that without a broker on their back-end, firms are constrained in terms of what level of discount they can offer.
Kraken does not have to disclose its cash on hand as a private company. But with valuations of $15 billion doing the rounds, it is unlikely to run out of money any time soon.
