The Commodity Futures Trading Commission (CFTC) has announced a significant shift in its approach to cryptocurrency regulation in 2025. Acting Chairman Pham on April 8, 2025, emphasized the need to end “regulation by enforcement” and focus on providing clear guidelines to innovators in the digital assets space.
In a major policy shift, in May 2025, the Commodity Futures Trading Commission (CFTC) announced that it is realigning its approach to regulating the crypto market. Speaking at a compliance roundtable, Acting Chairman Caroline Pham called for “a departure from the current regulation-by-enforcement mindset” and instead proposed a model of “constructive regulation through rulemaking, innovation engagement, and partnership.”
This policy change aims to bring clarity to the regulatory landscape, ensuring that resources are concentrated on addressing bad actors while supporting compliant innovation. The CFTC’s new direction includes collaborating with other regulatory bodies and stakeholders to develop comprehensive frameworks that address the unique challenges of the crypto market.
This comes at a time when the digital asset market is both expanding rapidly and facing intense scrutiny due to fraud, exchange collapses, and poor governance practices. The CFTC, which traditionally oversees derivatives and commodities, has been under pressure to bring greater clarity to how digital assets, especially Bitcoin and Ethereum, should be treated under federal law.
In the press release (9063-25), the Commission outlined a multi-pronged strategy:
• Launching industry engagement sessions through a new Crypto Innovation Advisory Council.
• Collaborating with the SEC to avoid jurisdictional overlap and regulatory conflict.
• Issuing preliminary guidance for centralized crypto exchanges and DeFi platforms on registration, reporting, and custody of customer funds.
Notably, the CFTC has emphasized the importance of maintaining flexibility while ensuring that regulatory principles such as market integrity, consumer protection, and anti-manipulation controls remain intact.
For Finassent’s clients and partners, the implications are significant. Compliance professionals should be aware that the CFTC’s involvement is not limited to futures and options. It is expanding to encompass spot markets and operational conduct. Entities dealing with token issuance, algorithmic trading, or derivatives involving crypto will need to update their risk models and AML protocols accordingly.
For compliance professionals and crypto companies, this development underscores the importance of staying abreast of regulatory changes and engaging with regulators to shape practical and effective policies.
Finassent advises organizations to:
- Monitor CFTC’s guidance on new rule proposals for DeFi and exchange platforms and review and update compliance programs to align with the CFTC’s evolving guidelines.
- Assessing custody procedures against CFTC’s proposed requirements
- Preparing to report suspicious activity beyond traditional SAR filings, including smart contract abuses and oracle manipulation
- Participate in public consultations and discussions to contribute insights and perspectives.
- Monitor collaborative efforts between the CFTC and other regulatory agencies to understand the broader regulatory environment.
The CFTC’s pivot could usher in a more coherent U.S. regulatory environment for digital assets, but only for those prepared to engage, comply, and innovate responsibly. By actively engaging with the CFTC’s strategic shift, firms can better position themselves to navigate the complexities of crypto regulation and foster sustainable growth in the digital assets sector.
