CFTC Rescinds Crypto Advisories Amid Regulatory Streamlining

The U.S. Commodity Futures Trading Commission (CFTC) has withdrawn two key crypto-related advisories, signaling a move toward a more streamlined and consistent regulatory approach to digital assets.

On Friday, the CFTC rescinded Staff Advisory No. 18-14, which was issued in May 2018 to guide virtual currency derivative listings. It required firms to coordinate closely with the CFTC’s surveillance group and established a five-bitcoin threshold for large trader reporting. The agency cited increased market maturity and internal expertise as reasons the advisory is no longer necessary.

The second advisory, Staff Advisory No. 23-07, issued in May 2023, emphasized risk oversight for derivatives clearing organizations (DCOs) handling digital assets. The CFTC stated that the withdrawal aims to ensure consistent regulatory treatment across all asset classes, including digital asset derivatives.

This shift reflects Acting Chair Caroline Pham’s broader initiative to return the agency to its core regulatory principles. The CFTC is simplifying its enforcement division and moving away from a “regulation by enforcement” model, in contrast to the U.S. Securities and Exchange Commission’s (SEC) previously aggressive stance under former Chair Gary Gensler.

Under new leadership, both agencies are signaling major shifts. The SEC, now led by Acting Chair Mark Uyeda, has launched a Crypto Task Force and scaled back several lawsuits and investigations into crypto companies.

Legal experts, including Liz Davis, a former CFTC enforcement attorney, see the guidance withdrawals as part of a larger CFTC restructuring. Davis pointed to possible reorganization efforts linked to the Department of Government Efficiency (DOGE) and Pham’s centralization strategy.

These developments indicate a more balanced and structured future for U.S. crypto regulation, with the CFTC focusing on regulatory clarity and operational efficiency.