The Commodity Futures Trading Commission (CFTC) is an independent federal regulatory agency responsible for regulation the U.S. derivatives market.
The CFTC was founded in 1974 with the enactment of the Commodity Futures Trading Commissions Act. During this time, most futures trading took place in the agricultural sector of the country. Since then, the Commission has had to diversify and modernize accordingly and its jurisdiction to include foreign currencies, as well as national and international government securities and stock indices.
When the Commodities Futures Modernization Act of 2000 was passed, the Commission’s mandate was expanded to develop a joint regulatory regime for single-stock futures with the Securities and Exchange Commission (SEC). Additionally, since the 2008 financial crash and the 2010 enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC has transitioned to provide more regulation to the dollar swaps market.
In 2014, the CFTC announced that it was considering regulating Bitcoin. It has since taken the position that Bitcoin is a commodity under the Commodity Exchange Act (CEA). Subsequently, in 2019, Ether, the native token of the Ethereum blockchain was also declared a commodity by former CFTC Chairman Heath Tarbert. The Commission has also noted several risks associated with trading cryptocurrency due in part to market volatility. In recent years, it has also expanded its efforts to clamp down on fraud and misappropriation in the digital currency market.