What is the US Commodity Futures Trading Commission (CFTC)?

The Commodity Futures Trading Commission, or CFTC, is a federal agency tasked with promoting the integrity, vibrancy and resiliency of the derivatives market. 

The agency was created in 1974 when the Commodity Futures Trading Commission Act was enacted. At the time, most futures trading happened in the agricultural sector but has since become much more varied. 

The CFTC now oversees commodity futures and options markets in the U.S. The agency's role was expanded following passage of the Dodd-Frank Act in 2010, bringing over-the-counter derivatives, called swaps, under its purview. 

The agency's mission is to prevent excessive speculation, manipulation of prices and fraud. The CFTC oversees derivatives clearing organizations, swap execution facilities and designated contract markets, among others.  

Within the CFTC

The Commission has five commissioners, who are appointed by the U.S. president with the advice and consent of the Senate. Each commissioner serves five-year terms. There can't be more than three commissioners from the same political party at any one time. 

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The agency is divided into 14 divisions and offices. The Division of Enforcement investigates and charges entities and individuals who violate the agency's rules and the Commodity Exchange Act. 

The CFTC also has an office focused on technology innovation and serves as the agency's "financial technology innovation hub," according to its website. 

The CFTC's role in crypto

The agency has classified bitcoin and ether as commodities. However, its sister agency, the Securities and Exchange Commission, has been mixed on whether ether could be a security and fall under its jurisdiction. 

The CFTC oversees the trading of futures and options contracts related to cryptocurrencies and ensures those markets operate fairly and transparently. The agency can also bring enforcement actions and it can conduct market surveillance to detect manipulation and abusive trading practices in the crypto derivatives markets. 

Current CFTC Chair Rostin Behnam has said that the agency does not have direct jurisdiction over the digital asset spot market and can only act on fraud or manipulation in the area. 


Disclaimer: This article was produced with the assistance of OpenAI’s ChatGPT 3.5/4 and reviewed and edited by our editorial team.

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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About Author

Sarah is a reporter at The Block covering policy, regulation and legal happenings. Before, Sarah was a reporter with CQ Legal writing about securities regulation, which is where she first started reporting on crypto. Sarah has also written for The Bond Buyer and American Banker, among other finance-related publications. She graduated from the University of Missouri and earned a degree in print and digital journalism. Sarah is based in Washington D.C., and is an avid coffee lover. You can follow her on Twitter @ForTheWynn.