CFTC Removes Digital Asset Advisories—How It Affects Crypto Derivative Compliance
R Tamara de Silva
Introduction
On March 28, 2025, the Commodity Futures Trading Commission (CFTC) took the notable step of withdrawing two staff advisories that had provided guidance on the regulation of digital asset derivatives. On March 27, 2025, the CFTC’s Division of Market Oversight (DMO) and Division of Clearing and Risk (DCR) jointly withdrew CFTC Staff Advisory No. 18-14. On the same day, CFTC Staff Advisory withdrew CFTC Staff Advisory No. 23-07.
Both advisories were originally issued to impose additional scrutiny and provide clarity for cryptocurrency-related derivative products, addressing risks in the listing and clearing of these products. Their withdrawal signals a shift toward treating digital asset derivatives under the same framework as traditional derivatives, without bespoke staff guidance for crypto markets.
Advisory 18-14 (2018) – Virtual Currency Listing Guidance
Background: CFTC Staff Advisory 18-14 was issued on May 21, 2018 as a joint advisory by DMO and DCR, offering exchanges and clearinghouses guidance for listing virtual currency derivative products.
At the time, the advisory aimed to clarify staff priorities and expectations in light of the unique challenges posed by nascent cryptocurrency markets.
It highlighted five key areas requiring particular attention when launching a new virtual currency futures or swaps contract: (1) enhanced market surveillance, (2) close coordination with CFTC staff, (3) large trader reporting, (4) outreach to market participants, and (5) strong DCO risk management and governance practices.
These focus areas reflected the CFTC staff’s concern that emerging crypto markets could present heightened risks – for example, many virtual currency trading platforms lacked the transparency and robust regulation of traditional U.S. exchanges, the markets were highly volatile with a short trading history, and there were questions about whether clearinghouses could adequately manage the risks of these new products.
In issuing Advisory 18-14, CFTC officials noted their intent to help the industry keep pace with innovation while ensuring proper risk controls and governance for crypto-based derivatives.
The additional guidance was meant to ensure that any exchange or clearinghouse listing a crypto derivative did so responsibly, considering the potential for market manipulation or operational risks inherent in the underlying spot markets.
Withdrawal of 18-14
By 2025, the CFTC staff determined that this extra guidance was no longer necessary. In the intervening years, digital asset markets had grown and matured significantly – for instance, since 2018, average daily volumes across Bitcoin futures increased over 300%, and aggregate open interest jumped over 800%. 25-07
With this increased experience and market maturity, DMO and DCR concluded that the 2018 advisory’s additional measures were no longer needed, and they withdrew Staff Advisory 18-14 in its entirety, effective immediately.
The withdrawal letter emphasized that its absence does not leave a regulatory gap. All existing requirements under the Commodity Exchange Act (CEA) and CFTC regulations continue to fully apply to virtual currency derivatives just as they do to any other product.
The CFTC’s established framework already mandates robust standards and procedures for listing and clearing derivatives. For example, even without the 2018 advisory, any designated contract market (DCM) or swap execution facility (SEF) listing a cryptocurrency derivative must maintain an effective market oversight program to ensure the contract is not readily susceptible to manipulation and to detect and prevent manipulation, price distortion, or market disruptions.
Likewise, core obligations such as large trader position reporting and risk management reviews remain in force for crypto derivatives offerings.
In short, the removal of Advisory 18-14 simply indicates that separate staff guidance is no longer viewed as necessary given that the standard regulatory regime and industry practices have evolved to address the relevant risks.
Advisory 23-07 (2023) – Digital Asset Clearing Risk Guidance
CFTC Staff Advisory 23-07 was issued by the DCR in May 2023 amid growing interest in expanding derivatives clearing services to digital assets. Titled “Review of Risks Associated with Expansion of DCO Clearing of Digital Assets,” this advisory set out the DCR staff’s heightened supervisory focus for clearinghouses (Derivatives Clearing Organizations, or DCOs) that clear crypto-related products. [ 25-08]
The 2023 advisory put the industry on notice that clearing digital asset derivatives would face enhanced oversight in certain core risk areas. DCR stated that “DCO registrants and applicants should expect that DCR will be placing emphasis on the potential risks and DCO core principles related to system safeguards, physical settlement procedures, and conflicts of interest” in connection with new digital asset clearing activities.
The advisory then elaborated on these areas of emphasis- in particular that clearinghouses needed to rigorously assess their systems and controls to handle the unique risks of cryptocurrencies (such as technological vulnerabilities, the challenges of physically delivering digital assets, and managing conflicts if the DCO or affiliates hold such assets). By issuing Advisory 23-07, DCR aimed to ensure that as crypto clearing expanded, it would not compromise core clearinghouse safeguards and principles.
Withdrawal of 23-07: On March 28, 2025, the Division of Clearing and Risk officially withdrew Staff Advisory 23-07, aligning its approach with the one taken for 18-14. In its withdrawal letter, DCR explained that it wanted to avoid any implication that digital asset derivatives require a different or special regulatory treatment compared to other derivatives. The staff made clear that retaining the 2023 advisory might erroneously suggest a two-tiered approach (one for crypto and one for everything else).
By rescinding the guidance, DCR is signaling that digital asset products will be overseen under the same principles and standards as traditional products, without separate informal advisories.
Importantly, DCR assured the industry that withdrawing the advisory would not weaken its oversight or risk management in any way. The letter explicitly noted that the change “will not impact DCR’s ability to oversee the financial integrity of cleared transactions and avoidance of systemic risk in the derivatives markets, while promoting responsible innovation.”
In other words, the CFTC will continue to hold clearinghouses to their full obligations to manage clearing risks and protect the system, even as it removes this extra layer of guidance. Consistent with this approach, DCR encouraged market participants to continue their customary open communications with CFTC staff regarding the clearing of digital asset derivatives.
Firms should still liaise with the agency on any questions or issues in this area, just as they would for clearing traditional products. The withdrawal of 23-07 does not signal any retreat from oversight, but rather a confidence that existing rules and ongoing dialogue are sufficient to address the risks of crypto derivative clearing.
Implications for Market Participants and Regulatory Outlook
The removal of these two staff advisories is a significant policy shift toward regulatory consistency across asset classes.
For exchanges, clearinghouses, and other institutional market participants, this move largely streamlines compliance: firms no longer need to account for separate CFTC staff advisories on crypto products but instead can focus on adhering to the uniform requirements of the CEA and CFTC regulations that govern derivatives generally. But in practical terms, the immediate compliance obligations for digital asset futures and swaps remain unchanged – all the core principles (such as preventing market manipulation, ensuring financial resource adequacy, safeguarding systems, and reporting large trader positions) continue to apply in full force to crypto derivatives, just as they do to oil, gold, or financial futures.
Market participants should ensure their risk management and governance programs for digital asset products meet these established standards, since the CFTC will hold them to the same level of scrutiny as any other product category.
From a broader perspective, the CFTC’s actions can be seen as part of the normalization of crypto within the regulatory perimeter. The special guidance from 2018 and 2023 was put in place when cryptocurrency markets were relatively new and perceived as particularly risky. Now, with years of industry development and a track record of regulated crypto derivatives trading, the agency appears confident that its standard rules are adequate to address the challenges of digital assets.
This normalization may encourage further institutional participation in crypto derivatives, as it clarifies that these products will not be subject to unpredictable extra-statutory requirements but rather the same predictable rulebook that governs traditional derivatives.
It may also suggest that the CFTC is looking toward a more level playing field where innovative digital asset products are welcome, as long as they fit into the existing regulatory framework designed to ensure market integrity and protect against systemic risks.
What withdrawal of Staff Advisories 18-14 and 23-07 do not do is affect the robust crypto specific risk disclaimers required in disclosure documents and offering documents under NFA Compliance Rule 2-51 and Interpretive Notice 9073. Keep disclaimers and legends prominent and not buried.
Conclusion
While the tailored guidance has been rescinded, the CFTC’s oversight is undiminished – if anything, the agency is reinforcing that crypto-related businesses will be held to the same standards as everyone else. Firms should continue engaging with the CFTC through normal channels and ensure all requirements (from rigorous surveillance to robust clearing risk management) are satisfied when dealing with digital asset derivatives. This development reflects a more mature market and a regulator comfortable with applying long-standing principles to new products, thereby promoting responsible innovation without compromising on market integrity.
At De Silva Law Offices, we remain committed to guiding institutional clients, digital asset firms, and legal professionals through the current regulatory landscape. We closely monitor regulatory developments in the digital asset space. Should you have any questions about how recent CFTC developments may impact your business operations, compliance strategy, or risk management practices, please contact us. Our firm is here to ensure you navigate these changes effectively, confidently, and strategically.
NB: This blog post is for informational purposes only and does not constitute legal advice.