**CFTC Collaborates with CME and Coinbase Derivatives to Launch Leveraged Crypto Products**
The Commodity Futures Trading Commission (CFTC) is actively working with major regulated exchanges, including CME Group and Coinbase Derivatives, to introduce leveraged spot cryptocurrency trading on U.S. markets as early as next month. Acting Chair Caroline Pham confirmed these plans, emphasizing that the initiative utilizes the CFTC’s existing authority under the Commodity Exchange Act to bring institutional-grade oversight and investor protections to leveraged crypto products.
**Leveraged Crypto Trading Products Under Development**
Discussions are underway with designated contract markets (DCMs) such as CME Group, Cboe Futures Exchange, ICE Futures, and crypto platforms like Coinbase Derivatives. The focus is on launching spot crypto trading products that feature margin, leverage, and financing options.
Pham highlighted that the CFTC is incorporating recommendations from the President’s Working Group on Digital Asset Markets to implement these products. This strategic move aims to provide retail investors with access to leveraged trading opportunities previously available primarily on offshore exchanges, but now with the added security of U.S. regulatory oversight.
**Bringing Leverage to U.S. Crypto Markets**
Leveraged trading enables investors to borrow funds to amplify their positions, potentially increasing both gains and losses. For example, a trader could control a $5,000 Bitcoin position by putting up only $1,000 in margin. Such products, while common on international crypto exchanges, have not yet been offered under the supervision of U.S. regulators like the CFTC.
By facilitating leveraged spot crypto trading on regulated exchanges, the CFTC aims to uphold higher standards of risk management and compliance, ensuring better investor protection. Pham’s approach complements ongoing efforts by both the CFTC and the Securities and Exchange Commission (SEC) to clarify the regulatory framework for digital assets. In a joint statement last September, both agencies affirmed that registered exchanges could enable trading of spot commodities such as cryptocurrencies.
Pham is proceeding within the current legal framework while continuing discussions with Congress to seek further clarity on crypto regulations.
**CFTC Progress Amid Leadership Uncertainty**
Despite a government shutdown delaying the Senate confirmation of President Trump’s nominee Mike Selig as permanent CFTC Chair, Pham is pressing forward with this initiative. Currently the sole commissioner at the agency, she wields significant authority to shape the CFTC’s policy direction during this uncertain period.
Mike Selig, chief counsel for the SEC’s Crypto Task Force, was nominated earlier this year but remains unconfirmed. Nonetheless, Pham is determined to make leveraged crypto products available to U.S. investors as soon as possible. She is expected to join MoonPay, a global crypto payments company, after her tenure at the CFTC concludes.
**Industry Reaction**
The plan to introduce leveraged spot crypto products on regulated exchanges has generated optimism among industry leaders. Alexander Blume, CEO of Two Prime Digital Assets, remarked on the joint SEC-CFTC statement from September:
*”This opens the door for even more mainstream adoption, granting direct access to these commodity assets at venues where trillions of dollars already reside.”*
This initiative signals a new chapter in the evolution of crypto trading in the U.S., balancing innovation with increased regulatory oversight to protect investors while expanding market opportunities.
https://coincentral.com/acting-cftc-chair-confirms-push-for-leveraged-spot-crypto-trading-products/
