How Do the CFTC’s Rules on “Disruptive Trading Practices” Apply to Front-Running in Crypto Derivatives?
The CFTC's rules on Disruptive Trading Practices (Regulation 180.1) prohibit manipulative and deceptive devices, including the misuse of non-public information. Front-running, which involves trading ahead of a client's order based on non-public knowledge, falls under this prohibition.
The CFTC can bring enforcement actions against individuals and exchanges that engage in or fail to prevent such practices in the crypto derivatives markets they oversee.