Caroline Pham, acting chair of the Commodities Futures Trading Commission (CFTC), has confirmed that the agency is holding direct discussions with regulated exchanges to introduce spot crypto trading with leverage as early as next month. According to Pham’s post on X, she validated a report by CoinDesk stating that the CFTC is working closely with several designated contract markets under its regulation.
These talks reportedly involve major financial players such as CME, Cboe Futures Exchange, and ICE Futures, alongside crypto-native platforms like Coinbase Derivatives, Kalshi, and Polymarket US. The exchanges are exploring products that allow investors to trade digital assets like bitcoin and ether with margin and financing options.
Pham emphasized that while Congress continues to work on digital asset legislation, the CFTC is utilizing existing powers under the Commodity Exchange Act to implement the recommendations outlined in the President’s Working Group on Digital Asset Markets report. This move signifies a significant shift in the U.S. regulatory approach to cryptocurrency trading.
Expanding Oversight in Crypto Markets
Leveraged spot trading enables investors to borrow funds to expand their crypto positions, amplifying both potential profits and losses. Traders deposit a fraction of the total value as margin while exchanges or brokers provide the remaining funds. For example, a trader using 5x leverage could control $5,000 worth of bitcoin with just $1,000 of their capital.
Although leveraged trading has been common on offshore platforms, bringing it under CFTC oversight would mark the first time such offerings are available under U.S. regulatory supervision. The plan aims to introduce stronger risk management measures, enhanced investor protection, and institutional oversight to a market often criticized for its volatility and lack of regulation.
Leadership Transition and Market Implications
Interestingly, Pham currently serves as the only commissioner at the CFTC, giving her wider influence over the agency’s direction. Her leadership comes amid delays in confirming Trump’s nominee, Mike Selig, as permanent chair due to the ongoing government shutdown. Reports also suggest that Pham could transition to MoonPay as chief legal and administrative officer after her CFTC tenure, though she has not commented on that matter.
This development aligns with earlier guidance from both the SEC and CFTC, clarifying that regulated exchanges can facilitate certain spot commodity trades, including digital assets. Industry observers believe this step could pave the way for broader institutional participation in crypto trading within the U.S., potentially reshaping how regulated markets handle digital commodities.