FBOT Registry Doesn’t Produce Offshore Crypto Exchanges to the US – Lawyer

Eli Cohen, general counsel at real-world asset (RWA) tokenization company Centrifuge, said the recent Commodity Futures Trading Commission (CFTC) consultation on offshore exchanges serving US residents under the Foreign Trade Commission (FBOT) framework would not bring offshore crypto exchanges to the US.

Cohen told CointeLegraph that settlements, clearings, and other regulatory requirements designed for the traditional financial system required to serve U.S. clients under the FBOT framework are not tailored to crypto exchanges and are difficult or impossible to meet.

CFTC guidance also said only the Authorized Futures Commission (FCM) exchange, the broker-dealer of futures contracts, is entitled to apply under the FBOT framework. He added:

“The main problem is that only regulated exchanges outside the US can apply to FBOT. Therefore, an existing regulatory framework is required in their country.”

CFTC Staff Guidance that registers under the FBOT framework and provides an overview of eligibility criteria for serving US residents. sauce: CFTC

Many exchanges have chosen to establish businesses in the Seychelles or other unregulated jurisdictions to avoid such a framework in the first place, Cohen added.

The best way to provide clarity for crypto exchanges is to pass Congress’ Cryptocurrency Market Structure Bill, codify crypto regulations into law, and create lasting changes that don’t move from management to management, Cohen said.

Related: “There are too few guardrails,” CFTC’s Johnson warns of risks in the forecast market.

CFTC’s “Crypto Sprint” promises clarity regarding regulations and financial system overhauls

CFTC’s “Crypto Sprint” is an initiative to overhaul crypto regulations to meet the agenda of US President Donald Trump’s agenda to make the United States a global leader in crypto.

The Trump administration’s code report issued in July proposed several policy recommendations.

Both regulators have proposed several joint policy efforts, including the possibility of financial markets becoming permanent, creating a 24/7 trading cycle across asset classes.

The proposed changes will be a significant deviation from legacy financial markets that are currently not closed during certain holidays at nights and weekends.

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