As the leading asset in the cryptocurrency sector, Bitcoin is widely recognized by US regulators and courts as a commodity, placing it under the Commodity Futures Trading Commission's jurisdiction. The agency is now soliciting public feedback on the potential expansion of derivatives trading to a 24/7 model, akin to the trading of Bitcoin and other digital assets. Although the CFTC is poised to become a key regulator of the crypto market as part of Congress' efforts to establish industry guidelines, its recent call for comments does not explicitly address digital asset oversight.
Instead, the request cites 'technological advancements and market demand' as driving forces behind the need for CFTC-regulated firms to handle transactions around the clock. According to Acting Chairman Caroline Pham, 'the CFTC must take a forward-looking approach to shifts in market structure to ensure our markets remain vibrant and resilient while protecting all participants.' The prospect of trading without downtime presents several challenges for US markets, including the need for 'governance frameworks, exchange staffing models, and technologies' to maintain market integrity and operational resilience. Such an expansion would require firms to perform live maintenance and technology patches, as well as human monitoring of systems and markets during extended hours - issues that digital asset operations have long grappled with.
Nevertheless, the CFTC would still require a change in law to gain direct authority over spot-market trading of Bitcoin and other tokens not classified as securities, which would fall under the Securities and Exchange Commission's purview.