How Does the CFTC Classify a Crypto Asset to Bring It under Its Jurisdiction for Derivatives Trading?

The Commodity Futures Trading Commission (CFTC) asserts jurisdiction over a crypto asset if it is classified as a "commodity." The CFTC views assets like Bitcoin and Ethereum as commodities. This classification allows the CFTC to regulate futures, options, and swaps based on these crypto assets, as well as the exchanges that list them.

Their authority stems from the Commodity Exchange Act (CEA), which prohibits fraud and manipulation in commodity markets.