On August 28, 2025, the Commodity Futures Trading Commission (CFTC) released Staff Letter 25-27, which confirms that offshore derivatives exchanges, including those offering crypto products, can register as foreign boards of trade (FBOTs) and legally serve U.S. traders. This advisory clarifies that the term 'located in the U.S.' pertains to physical presence rather than legal domicile, allowing these exchanges to operate without becoming designated contract markets (DCMs). This development follows a July 2024 amendment to Regulation 48.4, enabling more flexible routing of U.S. customer orders through global venues. For Web3 and decentralized trading platforms, this advisory marks a significant milestone, easing structural hurdles and ensuring compliance for offshore platforms entering the U.S. market. Furthermore, the CFTC aims to create a more transparent environment for trading activities while emphasizing regulatory clarity rather than punitive measures. The agency's recent efforts include rescinding previous advisories related to crypto derivatives, signaling a focus on fostering responsible innovation in the crypto space.

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