CFTC Cancels 28-Day Delivery Rule for Crypto: Here’s What It Means

The U.S. Commodity Futures Trading Commission (CFTC) has withdrawn its 28-day delivery rule for virtual currencies, opening new opportunities for the industry. This change aims to simplify regulations, promote innovation, and align cryptocurrencies more closely with traditional commodities. As the CFTC redefines its approach, it signals a shift toward a more accessible and regulated environment for crypto trading.

Key Takeaways

The CFTC has removed the outdated 28-day delivery rule, allowing for more regulated leveraged crypto products.
This decision aims to enhance U.S. oversight of cryptocurrency trading and encourage innovation.
The CFTC is working on new guidance and seeking public input through the “Crypto Sprint” initiative.
Confirmation of new leadership for the CFTC is forthcoming, which could further shape regulatory frameworks for digital assets.

CFTC Scraps the 28-Day Crypto Rule

CFTC Removes Outdated Guidelines

On December 11th, Caroline D. Pham, the Acting Chairman of the U.S. Commodity Futures Trading Commission (CFTC), announced a significant decision to revoke its outdated guidelines regarding the "actual delivery" of virtual currencies. This move removes a considerable regulatory barrier, allowing for the possibility of regulated leveraged crypto products under the Commodity Exchange Act (CEA). The CFTC aims to draw crypto trading away from offshore platforms and bring it under U.S. regulation.

Acting Chairman Pham emphasized that eliminating complex and outdated guidance which hinders the crypto sector and limits innovation is a core objective of the Administration this year. She stated, “Today’s announcement shows that with decisive action, real progress can be made to protect Americans by promoting access to safe U.S. markets.” Previously, if “actual delivery” did not occur within the strict 28-day timeframe, the transaction was classified as a futures contract, triggering the CFTC’s most stringent regulatory measures.

Understanding the 28-Day Rule

The 28-day rule was implemented in March 2020 amid uncertainty regarding virtual currency market developments. This rule created a major regulatory obstacle, pushing cryptocurrencies into a specialized category that distinguished them from traditional commodities. Consequently, federally regulated exchanges like Designated Contract Markets faced challenges in providing competitive, leveraged products for retail users.

With the withdrawal of this rule, the CFTC is moving toward normalizing the treatment of Bitcoin (BTC) and Ethereum (ETH) as traditional commodities, aligning them more closely with the agency’s overarching technology-neutral framework.

Anticipated Changes Ahead

Following the removal of the old rule, the CFTC is working on new guidance and frequently asked questions (FAQs) to inform the public. The agency is actively engaging stakeholders through its “Crypto Sprint” initiative, gathering feedback to refine regulations.

As a part of this effort, the CFTC has also initiated a pilot program that allows digital assets, including BTC, ETH, and USDC, to be utilized as collateral in regulated derivatives markets. This program establishes a clear framework for tokenized collateral while providing regulatory certainty that market participants have long sought. The removal of outdated restrictions aligns with recent legislation, such as the GENIUS Act, which has already taken precedence.

Collectively, these adjustments signal a significant transition toward a more modernized and streamlined regulatory environment.

Future Leadership of the CFTC

The Senate is progressing toward final confirmation votes for President Trump's nominees for leadership positions at the CFTC and FDIC. Recently, lawmakers voted 52-47 to advance a resolution that sets a schedule for final voting on multiple nominees next week. Among those nominated are Mike Selig, proposed to lead the CFTC, and Travis Hill, nominated as the permanent Chairman of the FDIC.

If both nominees are confirmed, it will bring an end to the interim period, paving the way for a comprehensive and coordinated regulatory framework for digital assets within U.S. jurisdiction.

Conclusion

The CFTC's withdrawal of the 28-day delivery rule marks a critical shift in how cryptocurrencies will be regulated, potentially fostering innovation and improving access to safe trading markets. With leadership changes on the horizon, the future of cryptocurrency regulation in the U.S. appears poised for significant development.