US opens door to foreign exchanges serving American customers

Americans are one step closer to legally trading on international digital asset exchanges, as the country’s sole remaining commodities regulator continues her lonely quest to make America wealthy again.

On August 28, the Commodity Futures Trading Commission (CFTC) issued an advisory that will clear the way for U.S. residents to access digital asset exchanges based beyond U.S. borders. Acting CFTC chair Caroline Pham said the advisory “provides the regulatory clarity needed to legally onshore trading activity that was driven out of the United States due to the unprecedented regulation by enforcement approach of the past several years.”

Pham said “American companies that were forced to set up shop in foreign jurisdictions to facilitate crypto asset trading now have a path back to U.S. markets … Starting now, the CFTC welcomes back Americans that want to trade efficiently and safely under CFTC regulations, and opens up U.S. markets to the rest of the world.”

Specifically, the CFTC’s Division of Market Oversight said it was clarifying the foreign board of trade (FBOT) framework for “non-U.S. entities legally organized and operating outside the United States that seek to provide persons physically located in the United States with direct market access to their trading platforms.”

The advisory says the FBOT applies equally to companies regardless of what type of assets they offer for trade. Pham said the CFTC had received “an increased number of inquiries, including when FBOT registration is required, and what are the requirements and procedures to obtain FBOT registration.”

Exchanges will still have to register with the CFTC, comply with rules prohibiting abusive trading, enforce rules maintaining market integrity, and be overseen by a foreign regulator “that has power to intervene in the market and the authority to share information with the CFTC.”

(That last bit recalls the language in the stablecoin-focused GENIUS Act signed into law by President Trump in July. That bill gave the Treasury Secretary broad latitude to determine whether a foreign stablecoin issuer’s regulatory oversight was sufficiently robust to allow the issuer’s tokens to be offered to U.S. customers without being subject to the same restrictions as domestic issuers.)

Long story short, international exchanges now have a clear path toward legally serving U.S. customers, without going through the bother of setting up a separate U.S. entity (assuming these companies are willing to come in from the cold). This would seem to drive the final nail into the coffin of Binance.US, the struggling U.S.-facing offshoot of the world’s largest exchange Binance.

U.S. customers will soon be able to access the far greater liquidity at these international exchanges without having to engage in the kind of digital skullduggery currently required to access many of these sites.

The shift won’t likely sit well with U.S.-based exchanges such as Coinbase (NASDAQ: COIN), Kraken, and Gemini, who stand to lose one of their major competitive advantages over their international rivals.

As of September 2, Pham will be the sole member of the CFTC’s traditionally five-member commission, as the other members have resigned while Brian Quintenz, Trump’s nominee for permanent chair, has yet to be confirmed by the Senate.

Pham appears to be enjoying her current ability to unilaterally set the tone for how the CFTC regulates (or doesn’t regulate) the digital asset sector. It’s worth noting that Pham herself plans to rejoin the private sector once Quintenz is confirmed. At this rate, she’ll have no shortage of options for high-paying employment in the sector she’s currently enabling.

CFTC deploys Nasdaq tech to police

Given the CFTC’s empty corridors of power, it’s handy that the regulator just announced that it was “enhancing its market surveillance and fraud detection capabilities” by deploying Nasdaq’s Market Surveillance platform. The Nasdaq gear is currently used by over 50 global exchanges and 20 regulatory agencies.

Pham said the Nasdaq system will provide “automated alerts and cross-market analytics that will benefit each of the CFTC’s operating divisions and better protect our markets from fraud, manipulation and abuse.”

The CFTC is expected to be named the primary regulator of digital assets as soon as Congress can pass a market structure bill and get it onto Trump’s desk. But the commissioner exodus and Quintenz’s delay have complicated this plan, something Pham alluded to in her Nasdaq announcement by saying the tech will help “our lean and talented staff” with “analyzing market trends and identifying unusual or disruptive trading activity.”

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You’ve got enforcement!

On August 21, the Securities and Exchange Commission (SEC) appointed Meg Ryan as the new director of its Division of Enforcement. Before you get excited, it’s not the orgasm-faking When Harry Met Sally actress, but former Army judge Margaret ‘Meg’ Ryan, who will assume her new role on September 2.

Since the SEC basically stopped/dropped all its legal actions against crypto operators since new leadership was installed this year, you might have thought the SEC no longer had an enforcement division. But SEC Chair Paul Atkins said Ryan “will lead the Division guided by Congress’ original intent: enforcing the securities laws, particularly as they relate to fraud and manipulation.”

Speaking of, recall that the SEC filed fraud charges in May against Unicoin and its top four execs for allegedly stealing $110 million from some 5,000 investors. This week, Unicoin CEO Alex Konanykhin told Decrypt that the company was filing a motion to dismiss the suit because the hullaballoo is apparently all ‘political theater’ based on former SEC Chair Gary Gensler’s alleged hatred of all things crypto.

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Trump’s crypto ventures march on

It wouldn’t be a U.S. update without fresh reports of the Trump family’s ever-expanding crypto empire. Case in point: a venture capital group associated with Donald Trump Jr. has made a significant investment in the Polymarket prediction market betting site, and Don Jr. has been added to the company’s advisory board. The “double-digit millions” investment, first reported by Axios, was made through 1789 Capital, which added Don Jr. as a partner last year.

Polymarket was forced out of the U.S. market in 2022 following a dustup with the CFTC over the site’s lack of a derivatives license. However, Polymarket is prepping a U.S. return following its $112 million acquisition in July of QCX, a CFTC-licensed derivatives exchange.

Interestingly, Don Jr. became a ‘strategic advisor’ to Polymarket rival Kalshi in January. Kalshi had its own issues with the CFTC until last year, when U.S. federal courts ruled that Kalshi’s election betting markets didn’t meet the legal definition of gambling.

On August 28, Reuters reported that American Bitcoin Corp (ABTC), the partnership of block reward miner Hut 8 (NASDAQ: HUT) and an entity backed by both Don Jr. and his brother Eric, plans to make its official Nasdaq debut in “early September.”

Hut 8 CEO Asher Genoot, whose company controls 80% of ABTC, said ABTC’s stock-for-stock merger with Nasdaq-listed Gryphon Digital Mining (NASDAQ: GRYP) offered “a lot more advantages to financing” than going the IPO route. Gryphon’s shares soared on the news, closing Thursday’s trading up a hefty 42% to $1.72.

ABTC also has plans to expand the crypto ‘treasury’ it established in May, following the purchase of 215 BTC worth around $23 million. Speaking on the sidelines of the Bitcoin Asia event in Hong Kong, Genoot said ABTC could be looking to acquire unspecified Asian companies in order to offer local investors the chance to invest in ‘publicly listed bitcoin assets.’

Eric Trump, who holds a 9.3% stake in ABTC, is also in Hong Kong to give a speech at the BTC Asia event. But his participation reportedly convinced some senior Hong Kong officials to withdraw their involvement in the conference, allegedly following a request by officials even higher up on China’s executive ladder.

According to the South China Morning Post, both Eric Yip Chee-hang, director of Hong Kong’s Securities and Futures Commission (SFC), and legislator/tech investor Johnny Ng Kit-chong, had their names removed from BTC Asia’s list of featured speakers. The change occurred sometime over the past month.

The SFC claimed Yip couldn’t attend due to a business trip, while Ng reportedly withdrew due to family reasons. But two individuals familiar with the matter told the SCMP that the Hong Kongers were advised against attending due to Eric Trump’s presence and the possibility that they might ‘interact’ with the president’s son.

It’s unclear why such advice might have been given. China-U.S. trade frictions could play a role, but China is also reportedly looking to launch yuan-based stablecoins to compete with the U.S. dollar abroad, and Eric’s family is involved in USD1, a stablecoin issued by their decentralized finance (DeFi) project World Liberty Financial (WLF). A case of two big dogs not wanting to share the same cage?

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Commerce puts gov’t data on the blockchain… Ledger of Truth?

U.S. Commerce Secretary Howard Lutnick raised some eyebrows this week when he announced that the government would begin putting gross domestic product and other government economic data “on the blockchain for data, distribution, and then we’re going to make that available to the entire government, so all of you can do it.”

One day later, the Commerce Department began making good on Lutnick’s promise, posting gross domestic product (GDP), consumer price index, and other fiscal benchmarks to nine different blockchains, including BTC, Ethereum, Solana, and Tron. Commerce is using blockchain oracle providers Chainlink and Pyth to provide the data feeds.

It wasn’t entirely clear from Lutnick’s statement why this data decision was made, given that this info is already available on government websites. The intention appears to be to rely on blockchain’s reputation for immutable data storage to instill confidence that the government data remains the (digital) gold standard.

But just because blockchain-inscribed data can’t be changed after it’s published doesn’t mean the data was accurate to start with. Anyone can publish virtually anything by including it with a blockchain transaction. The medium may be the message, but can you actually rely on that message?

Lutnick’s move has to be viewed against the backdrop that the Trump administration has been exceedingly vocal about disappointing jobs and inflation data emerging from various government departments. Trump has fired agency staff who published data that contradicts his preferred narrative of a healthy U.S. economy, and concerns are mounting that the people Trump appoints in their place are more loyal to Trump’s desires than to the truth.

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Avast, ye crypto swabs!

This month saw one of the more unusual crypto-related bills filed by a House member this year. HR 4988, introduced by Rep. David Schweikert (R-AZ), would authorize President Trump to “issue letters of marque and reprisal with respect to acts of aggression against the United States [by] a member of a criminal enterprise or any conspirator associated with an enterprise involved in cybercrimes, and for other purposes.”

For you non-history buffs out there, letters of marque originated several centuries ago. Nations at war would hire private citizens with ships and crews of their own (known as privateers) to fight on their side. Despite many privateers being known pirates, they were also authorized to target other pirates preying upon ships sailing the seven seas. Crucially, these letters allowed privateers a cut of any booty recovered via actions against enemy ships or other pirates.

HR 4988, aka the ‘Scam Farms Marque and Reprisal Authorization Act of 2025,’ would empower private sector digital warriors to “punish, deter, and prevent the acts of aggression and depredations and other acts of war committed by scam centers.”

In this case, the umbrella term ‘cybercrime’ includes actions that directly harm the state, like hacking of government systems, installing malware and trafficking in passwords. But it also includes actions that harm private citizens, including pig butchering scams, ransomware attacks, cryptocurrency theft, and identify theft.

Digital privateers would have to post a security bond of an unspecified amount before being allowed to “employ all means reasonably necessary to seize outside the geographic boundaries of the United States and its territories the person and property of any individual or foreign government … who the President determines is a member of a criminal enterprise or any conspirator associated with an enterprise involved in cybercrime who is responsible for an act of aggression against the United States.”

There are already plenty of blockchain sleuths out there (like ZachXBT), but Schweikert’s bill appears to incentivize them to not just identify cyber bad actors but to use their own tools against them to recover stolen assets and/or eliminate their capacity to continue their illicit activities.

For the record, while Congress has been on its scheduled month-long break, Schweikert’s bill has yet to attract a single co-sponsor, and it remains to be seen how much support his proposal will receive.

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Watch: Breaking down solutions to blockchain regulation hurdles

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