We’re back to the future with crypto trading
The CFTC’s decision to make it easier for a global crypto platform to accept US customers could widen the door to access liquidity, but despite the hype, it was a door that was already an Ajar.
The politicization of US commodity trading was once again highlighted in late August when the CFTC’s representative chairman outlined the Foreign Trade Commission (FBOT) registration framework, which is seeking to provide US clients with direct market access to trading platforms.
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The move was described as providing regulatory clarity necessary for legally land trading activities driven offshore due to the “enforcement-based regulatory” approach of the past few years.
Caroline Femme, Source: CFTC
“Forcing American companies to set up stores in foreign jurisdictions to promote cryptocurrency trading, they now have a way back to the US market,” says Caroline Fam. The FBOT registration framework applies to all asset classes.
Read more: “Explore” cftc to enable microcollected platforms to serve the US market
According to the CFTC, there was confusion as to whether non-US exchanges should register as FBOT or DCM (or whether they should be registered in designated contract markets).
A more relaxed regulatory regime should make it easier for US-based exchanges to provide services such as permanent futures trading, staking, leverage and more. However, as one market participant observed, these entities are still subject to CFTC jurisdiction.
Factors that determine whether approval is granted include whether the platform’s home regulator is considered to apply standards equivalent to US standards. This has long been the case of traditional futures exchanges, and is now revealed in the cryptocurrency market.
New: In a recent speech, CFTC Chair @CAROLINEDPHAM said it is investigating whether foreign crypto trading platforms that follow robust, crypto-specific rules, such as the EU’s MICA framework, can be recognized under US cross-border regulations.
That continues on pic.twitter.com/ft1lampvrh
– Eleanorterrett (@Eleanorterrett) September 9, 2025
The most common workaround for US retailers was to access overseas exchanges via VPNs. However, this is not a completely reliable mechanism. This is because many people are facing termination or problems with their accounts regarding taxation of transaction profits.
Institutional clients are at their disposal to use more sophisticated options, such as opening accounts through entities in offshore jurisdictions, but the US is keen to bring as much of this business to land as possible.
Although it remains to be seen what this means for market depth and spreads, it can be assumed that CFTC will step up its efforts to create a more encryption-friendly regulatory environment.
Exchange following the European Commission’s integrated consensus
Capital market integration has been a key objective of the European Commission for the past decade, and given the acquisitions and product movements seen over the past 12 months, we can expect further fusion in the exchange space.
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Finished in July, the Swiss and Spanish financial centre infrastructure providers as “one” with the acquisition of AQUIS as the sole exchange group offering listed venues for all European financial centres, including Switzerland, the UK and the EU.
Six now claim to be aggregating European market share of 15%, aiming to increase it to 20%.
However, the main mover in the space is undoubtedly Euronext, integrating the BolsaItana Group into its business for the majority of the last four years.
In July, Pan-European Market Infrastructure submitted a voluntary exchange offer to the parent company of Greek financial infrastructure group Athex (Athens Stock Exchange).
In addition to geographic diversification, the company highlights the potential synergy of integrating Athex into EuroNext’s trading platform and the new CSD platform currently under development, along with integrating the liquidation business.
At the PostTrade 360 2025 held in Stockholm earlier this month, Pierre Davoust, head of EuroNext Securities, said that by September 2026, the client could manage four Central European markets: France, the Netherlands, Belgium and Italy.
The consolidation trend is also evident outside of Europe, with the Canadian Stock Exchange buying up the Australian national stock exchange.
Kraken is the challenge of prop trading
Estimates of value in the prop trade industry vary, and some observers believe it is worth $2 billion in the background of challenge fees that can run from tens to thousands to thousands of dollars.
However, the seemingly simple business model makes experienced brokers better through a combination of technology costs, the difficulty of acquiring and maintaining customers, and traders who buy fewer challenges.
So why did one of the world’s largest crypto platforms enter the prop market when business model sustainability is no longer an issue? The answer may be in the similarities between cryptography and prop trading.
Main came to the stream three months ago and glitched him hard about the success of the breakout and being the only prop company in Crypto that actually works.
He just sold it to Kraken (7-8 fig problem?). Legend. ct unc. https://t.co/nj0ixc4n0y pic.twitter.com/tvdaaczkfs
– Andy (@ayyendy) September 4, 2025
Both areas operate in regulatory fringes, with crypto companies in particular historically relaxing about attracting customers without a continuous stream of all regulatory ducks.
Kraken’s irony, which generated $1.5 billion in revenue last year, enters prop space at a time when a person who reads the CEO’s comments from Prop Capital appears to have a dominant tendency for companies to close prop trading operations.
Read more: Kraken’s breakout bet could normalize prop trading across the crypto industry
Propel CEO Mitchell Ali suggested that unsustainable industry practices are a key factor in the company’s decision to reduce fees as companies aim to increase trading volumes. Others complain that without backend brokers, companies are constrained in what level of discount they can offer.
Kraken does not need to disclose cash on hand as a private company. However, with a round of $15 billion valuations, you rarely run out of money right away.
