USA - Nationwide: A Derivatives Overview

Beyond Enforcement: the CFTC’s Pivot on Digital Assets

In December 2025, the US Commodity Futures Trading Commission (CFTC) announced that listed spot cryptocurrency products would begin trading on CFTC-registered futures exchanges, and Bitnomial launched what it described as the first US leveraged retail spot crypto exchange operating under CFTC oversight. The evolution of digital asset markets has clear relevance for derivatives, as well as collateral management and financial infrastructure. These developments have required the CFTC to reconsider traditional regulation. In 2025 and 2026, the CFTC issued guidance, launched pilot programs, and coordinated with the Securities and Exchange Commission (SEC) to modernize the regulatory architecture for digital assets. This article examines the evolving role of the CFTC in the regulation of digital assets.

A Digital Asset Framework

Digital assets (also sometimes referred to as “crypto assets”) are representations of electronically stored value that exist on distributed ledger systems. Until recently, no clear legal taxonomy existed for these types of assets. In March 2026, the SEC issued an interpretation (the “Interpretation”) and the CFTC joined it for purposes of administering the Commodity Exchange Act consistent with that Interpretation. The Interpretation established a five-part taxonomy for digital assets:

• digital commodities (eg, Bitcoin and Ether);
• digital collectibles (eg, CryptoPunks);
• digital tools (eg, Ethereum Name Service domain names);
• stablecoins (eg, payment stablecoins); and
• digital securities.

The Interpretation helped to clarify agency jurisdiction. The first three categories of digital assets generally are not themselves “securities” (although they may still be offered and sold through investment contracts, which may be considered securities). Digital securities are the only category that the SEC determined plainly constitute “securities.” Stablecoins may or may not be securities depending on their characteristics.

Digital commodities are assets that derive value from the programmatic operation of a “functional” crypto system and supply and demand. The Interpretation places digital commodities within the CFTC’s jurisdiction. By contrast, digital collectibles usually represent rights to creative works and can be collected and used, such as digital baseball cards. Digital tools grant their holder access to a practical function, such as memberships, tickets or badges; their value is not derived from an expectation of profit arising merely from ownership. Finally, stablecoins are crypto assets designed to maintain a stable value relative to a reference asset, such as the US dollar. Payment stablecoins from permitted issuers will be expressly excluded from the definition of “security” when the US Guiding and Establishing National Innovation for US Stablecoins Act (the “GENIUS Act”) becomes effective. A non-payment stablecoin or a non-compliant payment stablecoin may be deemed a security depending on its characteristics. Digital (or tokenized) securities are financial instruments that fall within the definition of “security,” including tokenized versions of traditional securities.

The CFTC’s Role in Regulating Digital Assets

If a digital asset is not a security, the CFTC may have authority to regulate related transactions. Two areas where the CFTC has acted are discussed below: derivatives on digital commodities and tokenized assets as collateral in derivatives markets.

CFTC Letter No 25-39 – Tokenized Collateral Guide

In December 2025, CFTC staff issued Letter No 25-39 (“Letter 39”), providing interpretive guidance on how tokenized assets may be used as collateral in the trading of futures and swaps. A “tokenized asset” is a digital representation of a real-world asset, such as a US Treasury, corporate bond or money market fund share, recorded on a distributed ledger as a digital token. Tokenized assets have no standalone category in the taxonomy; they follow the classification of their underlying asset (ie, a tokenized Treasury would be a digital security).

Letter 39 recommends, for tokenized assets, a focus on assets eligible to serve as regulatory margin – ie, where the underlying assets are liquid, with already established haircuts, and with low volatility (able to hold value over time and survive financial stress). Letter 39 reinforces the standard in CFTC Rule 39.13(g), requiring that assets accepted as initial margin have minimal credit, market and liquidity risk. Any tokenized version of an eligible asset must have the same (or functionally equivalent) economic rights as that of the asset being represented.

Regarding legal enforceability, entities registered with the CFTC, such as futures commission merchants (FCMs) and swap dealers, must demonstrate that non-cash assets collected as regulatory margin meet legal enforceability requirements (eg, netting, security interest in the collateral, and settlement). Segregation and custody requirements must also apply equally to tokenized collateral, in the same manner as traditional collateral. Haircuts and valuations must be applied to tokenized assets consistently with existing rules, as long as settlement-time differences, credit, market and liquidity risks are appropriately reflected.

While Letter 39 opens the door considerably to the use of tokenized assets as collateral, it creates operational challenges, potentially requiring updated eligibility provisions, custodial agreements, risk monitoring, and valuation and settlement mechanics.

CFTC Letter No 25-40 – Staff No-Action Position Regarding Digital Assets Accepted as Margin Collateral

The CFTC’s Letter No 25-40 (“Letter 40”), later reissued as Letter 26-05, takes a no-action position for FCMs that accept certain non-security digital assets as customer margin collateral. Letter 40 also established that, during a three-month conditional period, an FCM relying on Letter 40 can only accept as digital asset margin collateral Bitcoin, Ether and payment stablecoins. During these periods, an FCM relying on Letter 40 is required to report weekly the total amount of digital assets held in customer accounts, identifying each asset type separately for each of the three account classes for customer assets, and to promptly notify CFTC staff of any important issue affecting the use of digital assets as customer margin collateral.

Project Crypto

The SEC initiative Project Crypto was launched in July 2025. In January 2026, the SEC announced that the CFTC was partnering on the initiative. This effort produced the taxonomy Interpretation discussed previously. Additional priorities include rulemaking to allow responsible use of additional forms of tokenized collateral and facilitating the onshoring of digital asset derivative products that were marketed outside the USA pending regulatory advice.

Withdrawal of the 2020 “Actual Delivery” Guidance

Under the Commodity Exchange Act, certain leveraged or margined retail commodity transactions are treated as futures contracts unless the contract results in actual delivery within 28 days. In December 2025, the CFTC withdrew its 2020 interpretive guidance on “actual delivery” of digital assets in retail commodity transactions. The guidance had sought to define what actual delivery meant in the digital asset context. In withdrawing the guidance, then-acting Chairman Caroline Pham explained that the guidance was withdrawn as part of a broader effort to eliminate unnecessary regulatory barriers.

Conclusion

Previously, the dominant oversight mechanism was regulation by enforcement, an approach that sometimes left participants navigating a landscape defined by case-outcomes rather than rules. The CFTC’s initiatives depart from that posture. As Director of Enforcement David I. Miller recently remarked, “the regulation by enforcement era is over.”

For digital markets operating under regulatory uncertainty, the Interpretation, Letters and agency coordination of the past year signalled a significant shift, but substantial work remains. Crafting legal and contractual approaches that can keep pace with both the regulatory and technological developments in digital asset markets will continue to be a rapidly evolving, uncertain and challenging area of legal practice.