Crypto Reporter

Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated: 

August 5, 2025

The Commodity Futures Trading Commission plans to allow spot cryptocurrency trading on exchanges it already regulates, expanding access to digital assets through federally registered futures markets.

CFTC Acting Chairman Caroline Pham unveiled the plan on Monday, calling it the first move in the commission’s broader “crypto sprint,” a program aimed at quickly implementing key policy recommendations from the President’s Working Group on Digital Asset Markets.

Pham framed the effort as part of a broader push under President Trump’s leadership to bring digital assets into the federal regulatory fold.

She said the initiative would enable immediate trading of digital assets at the federal level, in coordination with the Securities and Exchange Commission’s recently announced Project Crypto.

CFTC Invites Input on Spot Crypto Listings via DCMs

“There is a clear and simple solution the CFTC can implement now,” Pham said. “The Commodity Exchange Act currently requires that retail trading of commodities with leverage, margin, or financing must be conducted on a designated contract market.

“Starting today, we invite all stakeholders to work with us on providing regulatory clarity on how to list spot crypto asset contracts on a DCM using our existing authority.”

The CFTC’s plan would enable exchanges already registered to trade futures contracts, known as Designated Contract Markets, to also offer spot trading for cryptocurrencies like Bitcoin and Ethereum.

In spot trading, buyers and sellers exchange digital assets directly and immediately, unlike futures trading, where contracts are based on predictions of future crypto prices.

Regulators Ask for Clarity on Crypto-Securities Boundary

Stakeholders have until Aug. 18, 2025, to share their feedback through the CFTC’s website. In the meantime, the agency is seeking input on how to regulate spot crypto trading. It is focusing on laws that govern retail commodity transactions. Additionally, it is reviewing compliance requirements for registered exchanges.

The commission is also seeking input on how its framework would interact with securities regulations, especially in cases where crypto assets may not meet the legal definition of securities.

All comments submitted will be made public on the CFTC’s website.

Unified Crypto Framework May Merge Futures and Securities Oversight

The move signals growing coordination between the CFTC and SEC as both agencies look to bring clarity to crypto regulation.

Just last week, SEC Chairman Paul Atkins introduced Project Crypto. This is a broad initiative to modernize securities laws for blockchain-based assets. It aims to clarify how crypto assets are classified, distributed and traded. In particular, it seeks to resolve longstanding confusion around the Howey test.

The test is used to determine whether an asset qualifies as a security. Over time, it has become a sticking point for crypto companies. As a result, many have treated their tokens as securities by default. They remain cautious due to the risk of enforcement actions.

Project Crypto is expected to provide a more tailored regulatory approach.

With the CFTC’s latest initiative, the US may be moving closer to a dual-agency framework for digital asset regulation. This shift involves both the CFTC and the SEC. It comes at a time of growing demand from institutional and retail investors. Many are seeking clearer, regulated access to cryptocurrencies.

If finalized, the CFTC’s plan could open the door for spot crypto trading under existing commodity laws, giving markets greater legal certainty without waiting for new legislation from Congress.

Earlier today, Bitcoin (BTC) briefly fell below $115,000 – hitting a low of $114,116 – triggering panic selling across major crypto exchanges, including Binance. Sharp shifts in several key metrics, such as open interest and net taker volume, confirm the intensity of the sell-off.

Bitcoin Decline Wipes Out $500 Million In Open Interest

According to a Quicktake post on CryptoQuant by contributor Amr Taha, BTC’s drop below $115,000 led to a sharp decline in open interest on Binance, which fell from $14 billion to under $13.5 billion.

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The following chart shows Binance open interest declining by nearly 4% in a single day – a move typically associated with liquidation events. Supporting this, data from CoinGlass shows $760 million in liquidations over the past 24 hours.

To explain, such large-scale liquidation events typically occur when leveraged traders face forced position closures – long or short – due to margin calls. The sharp BTC drop resulted in the liquidation of approximately 183,514 traders in just 24 hours.

In addition to falling open interest and widespread long liquidations, Binance’s net taker volume also points to rising bearish sentiment. The metric plunged to -$160 million, underscoring aggressive selling pressure.

For context, Binance net taker volume measures the difference between market buy and sell orders initiated by takers. A positive value suggests dominant buying activity (bullish), while a negative value reflects dominant selling activity (bearish).

Binance net taker volume dropping into negative territory further reinforces bearish pressure on BTC. Since this net selling coincided with the decline in open interest, it indicates that many derivatives traders are panic-closing late long positions.

Will BTC Make Recovery?

Despite the falling price, shrinking open interest, and negative net taker volume, Taha suggests that these bearish indicators could paradoxically set the stage for a short-term rebound.

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Bitcoin’s selling pressure may be nearing exhaustion, while short interest continues to rise. This combination could trigger a market rebalancing phase, potentially paving the way for price stabilization – or even a short squeeze-driven bounce.

However, on-chain data points to continued bearish momentum. The increasing share of new investors among BTC holders may lead to overheated market conditions in the near term. 

At the same time, exchange reserves are rising, which could contribute to more selling pressure. Long-term BTC holders also appear to be selling in significant volumes, suggesting potential rally exhaustion.

That said, BTC could still remain on track for its year-end target of $180,000 – but only if it holds key support at $110,000. At press time, Bitcoin is trading at $115,310, down 2.1% over the past 24 hours.

Featured image from Unsplash, charts from CryptoQuant and TradingView.com

We are pleased to announce the launch of Kraken Derivatives US, offered by regulated US derivatives. The launch will provide direct access to crypto futures listed in the CME through the integrated Kraken Pro trading experience.

With Kraken Derivatives US, our clients will be able to provide a set of crypto futures along with our extensive spot market offerings, and immediately funding allows for seamless transfer of collateral. This integration provides clients with a unified interface for deploying sophisticated strategies and managing risk efficiently. This is all from within a regulated environment supported by industry-leading infrastructure.

“The launch allows US Kraken clients to exchange futures alongside one of the world’s most liquid cryptocurrency spot markets,” said Shannon Kurtas, Kraken’s exchange director. “This is a meaningful step to give traders access to a wide range of markets and increased capital efficiency within a regulated, high-performance environment.”

Today’s launch marks a major milestone with a broader vision of building a comprehensive multi-asset trading platform. In April, it introduced fee-free stock trading in the US, providing access to over 11,000 shares and ETFs with 24-hour availability. We also recently announced that we will offer tokenized stocks.

Kurtas continues. “Kraken Derivatives will further enhance a unified trading experience that allows you to access digital and traditional assets side by side without compromising functionality, performance and liquidity.”

Kraken Derivatives US’s debut follows the acquisition of Ninjatrader, a leading US retail futures platform. Later this year, we plan to expand our offering to include commodities, bonds, forex and equity futures, further strengthening our position as a unified venue for digital and traditional asset classes.

Hong Kong has been ramping up efforts to strengthen its position as a digital asset hub. Hong Kong’s Securities and Futures Commission (SFC) plans to introduce virtual asset derivatives trading for professional investors.

According to a 4 June 2025 China Daily report, Christopher Hui Ching-yu, Secretary for Financial Services and the Treasury, said the move is part of the city’s push to bolster its global digital asset market competitiveness.

The SFC said robust risk management measures will be prioritized in line with the move. This will ensure trades are conducted “in an orderly, transparent and secure manner.”

HONG KONG PLANS TO LEGALIZE #BITCOIN & CRYPTO DERIVATIVES TRADING!
ASIA’S ALL-IN ON BITCOIN BULL RUN! pic.twitter.com/1BwQfkWeJh

— Marzell (@MarzellCrypto) June 5, 2025

According to the SFC, the proposed product will facilitate efficient risk transfers, boost liquidity in the underlying spot markets — where cryptocurrencies are traded for immediate payment and delivery — and support experienced investors in engaging in hedging and leveraging strategies.

Furthermore, Hui said that the Financial Services and the Treasury Bureau is preparing to issue the second policy statement on virtual assets, laying out future policy directions.

DISCOVER: 9+ Best High-Risk, High-Reward Crypto to Buy in June 2025

Active Virtual Asset Development Since October 2022

This follows the release of Hong Kong Special Administrative Region government’s first policy statement on virtual asset development in October 2022, which set out its stance and strategy to build a vibrant crypto ecosystem in the city.

Earlier this year, the SFC outlined plans to broaden the range of virtual asset products and services available to different types of investors.

As part of its efforts, the SFC permitted staking services for virtual assets, enabling investors to earn additional returns.

In April, the SFC approved two licensed virtual asset trading platforms to offer staking services under specific conditions. This was followed by two SFC-authorized virtual asset spot exchange traded funds (ETFs) revising their documentation to engage in staking activities.

Explore: Hong Kong SFC Greenlights Staking Services For Licensed Crypto Platforms

Hong Kong SFC Greenlights Staking Services For Licensed Crypto Platforms

In April 2025, Hong Kong’s SFC officially authorized licensed virtual asset trading platforms to offer staking services. This move was aimed to reinforce the city’s status as a leading hub for digital assets in the Asia-Pacific region.

The announcement was made in tandem with a keynote speech by SFC Executive Director Christina Choi at the 2025 Hong Kong Web3 Festival. Choi talked about how blockchain has the potential to reshape finance.  

Furthermore, Hong Kong-based cryptocurrency exchange HashKey received regulatory approval to offer staking services. This move was meant to expand the appeal of proof-of-stake (PoS) investments like spot Ether ETFs among institutional investors.

EXPLORE: 10 Best AI Crypto Coins to Invest in 2025

Hong Kong Plans To Introduce Crypto Derivatives Trading Soon

Recently hosted as European institutional appetite for digital assets has increased and its regulatory framework has been strengthened Derivative Unlocking: Regulations, Markets, and beyond. The session was discussed through the growing relevance of crypto derivatives for professional investors, which attracted market leaders and asset managers.

Let’s take a deeper look at that discussion after Europe’s largest regulated futures offering was recently launched.

Strategic fit: Why derivatives, why now?

This panel was opened by framing derivatives as essential equipment for capital efficiency, risk management and portfolio accuracy rather than high octane trading tools. For institutional investors juggling liquidity constraints, multi-asset mandates, or strict risk overlays, Crypto derivatives provide a flexible way to express market views without disrupting core holdings.

The agency is already deploying crypto futures and options to hedge long ETF exposures, execute underlying transactions, and deploy dynamic overlays. These tools allow targeting strategies focused on long, short or volatility, without the need for full exposure to the underlying asset. In a market that travels 24/7, the ability to respond in real time has not only been helpful, but it has become necessary.

Evolving Playbook: From Passive Exposure to Active Accuracy

Derivatives now support an ever-growing institutional strategy. Passive managers can hedge volatility without selling spot positions. Active strategies, including base trading, structured payoffs and tactical rebalancing, are seeing wider adoption thanks to the flexibility offered by flexibility derivatives.

Kraken Derivatives Head of Derivatives As pointed out by Alexia Theodorou, this evolution reflects the traditional financial (Tradfi) arc. Crypto is following the lawsuit, with its infrastructure mature and meeting facility grade standards.

And the profiles of market participants are changing. Once the realm of HNWIS and Crypto-Native hedge funds has expanded to include banks, pension funds and asset managers entering the space through ETF exposure and yield optimization strategies.

Europe’s Rise: Liquidity, Regulation, Local Thinking

Europe has emerged as a global growth engine for not only volumes but crypto. With more than a third of global cryptocurrency activities currently occurring in the region, the institutional traction is unmistakable.

Why Europe, and why now? The clarity of regulations through MICA and MIFID allows framework agencies to tackle it. The euro has become the second most traded Fiat currency in crypto. And perhaps most importantly, there is a change in thinking. Across European financial institutions, a new generation of product managers and portfolio strategists have stepped into the role of Crypto Fluency burning into professional DNA.

Building confidence through platform design

The main takeaway from the panel was the growing value of platform integration. Institutions are increasingly looking for integrated solutions that simplify onboarding, reduce legal and compliance friction, and provide flexible execution without bouncing between counterparties.

The appeal of a one-stop platform is simple. There are fewer intermediaries, slower trading speeds, and improved capital deployment. In a volatile environment where agility is more important than ever, such operational efficiency becomes competitive.

Reconstructing derivatives as a risk tool for narratives

An important part of the discussion focused on changing perceptions. In retail circles, derivatives are often synonymous with speculation and extreme leverage. But in the case of facility desks, they are the first equipment at risk.

Crypto-drivers allow institutions to manage negative side exposures, lock profits, and meet trustee delegations through accurate rules-based portfolio strategies. This is not about chasing profits, it’s about managing risk in a highly dynamic market, and doing so with tools familiar to other asset classes, from Forex to interest rates.

Cryptographic derivatives are the basis of European cryptography

Institutional access and infrastructure are stronger than ever. The clarity of European regulations combines with an increased liquidity and a mature investor base, positioning the region as the epicenter of cryptocurrency trading.

Derivatives are central to their story as a component of modern portfolio management in the digital asset ecosystem. We are witnessing the strategic integration of crypto into institutional funding. The derivative is bridges.

CME Group is launching new futures contracts based on the payments altcoin XRP.

The derivatives marketplace giant says in a new announcement that it will be rolling out a micro-sized XRP-based futures contract worth 2,500 XRP and a larger-sized one worth 50,000 XRP.

The launch date is scheduled for May 19th, but the firm notes both contracts are still pending regulatory review.

Giovanni Vicioso, CME’s global head of crypto products, says the new product rollout is due to burgeoning client demand for regulated products based on digital assets.

“Interest in XRP and its underlying ledger (XRPL) has steadily increased as institutional and retail adoption for the network grows, and we are pleased to launch these new futures contracts to provide a capital-efficient toolset to support clients’ investment and hedging strategies.”

CME Group first launched Bitcoin (BTC) futures in 2020 and Ethereum (ETH) futures in 2022, and in March, the marketplace added Solana (SOL)-based contracts. The financial services firm’s futures products started rolling out on the retail trading giant Robinhood in January.

XRP is trading at $2.19 at time of writing. The fourth-ranked crypto asset by market cap is down more than 1.5% in the past 24 hours but is up nearly 6% in the past week.

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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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