FIA Warns Current Law Leaves Spot Trading Outside CFTC Reach

In response to a CFTC request for input on its Listed Spot Crypto Trading Initiative, the Futures Industry Association ("FIA") asserted that the Commodity Exchange Act ("CEA") does not provide the CFTC with comprehensive authority to regulate spot digital asset markets.

In the letter, the FIA expressed support for federal efforts to establish a clear regulatory framework. The FIA stated that while designated contract markets ("DCMs") may already list spot transactions outside CFTC oversight, the Commission’s jurisdiction is limited to retail leveraged, margined, or financed commodity trades under Section 2(c)(2)(D) ("Jurisdiction of Commission") of the CEA. The FIA highlighted that transactions falling outside the "actual delivery" exception in that section are treated as futures contracts and must occur on a regulated exchange.

The FIA cautioned that relying on the CEA’s narrow provisions risks creating uncertainty for both DCMs and market participants. The FIA argued that only congressional action—such as passage of the CLARITY Act—can provide the CFTC with the explicit authority needed to regulate spot digital commodities and urged Congress to adopt clear and durable authority over spot digital commodity markets.

The FIA said it would submit comments on any Commission proposal to facilitate regulated markets for financed spot crypto purchases.