Blockchain.com Files for CFTC Licenses to Bring Crypto Derivatives and Prediction Markets to US Users
Blockchain.com has applied for two federal licenses that would let it offer crypto derivatives trading and prediction markets to US customers for the first time. The applications, filed with the Commodity Futures Trading Commission, cover a designated contract market license and registration as a futures commission merchant. For accounting firms, auditors, and CFOs who track digital asset regulation, this is a significant jurisdictional development: it signals that one of the sector's largest wallet and trading platforms is betting that the CFTC pathway is now viable for mainstream crypto derivatives distribution in the United States.
What Blockchain.com Has Applied For
The two license types sit at the heart of US commodity and derivatives law. A designated contract market designation allows a platform to list futures and swaps contracts for trading by eligible participants. Registration as a futures commission merchant permits the platform to solicit and accept customer orders for derivatives, holding customer margin in the process.
Designated Contract Market License
A DCM must satisfy CFTC core principles covering, among other things, contract design, market surveillance, financial integrity of transactions, and protection of customer funds. Winning DCM status would place Blockchain.com alongside traditional exchanges as a federally recognised trading venue under the Commodity Exchange Act.
Futures Commission Merchant Registration
FCM registration carries its own capital, segregation, and reporting obligations. Customer funds must be kept separate from proprietary funds, and the firm must file periodic financial reports with the CFTC. For a crypto-native business, this is a materially different operating model from an unregulated spot exchange, with direct implications for how the firm structures its balance sheet and how its auditors assess going-concern risk.
The Products in Scope
Blockchain.com already operates prediction markets and crypto derivatives products, but currently restricts both to non-US customers. Chief Executive and co-founder Peter Smith stated publicly that users should be able to manage digital assets, trade derivatives, and take positions on real-world events without switching between multiple applications. The licensing push is the mechanism to make that possible in the US market.
Prediction Markets
Prediction markets let participants take positions on the outcome of real-world events, ranging from elections to economic data releases. Their regulatory status in the US has been contested for years: the CFTC has intervened in some platforms' operations while allowing others to continue under exemptions. Blockchain.com obtaining a DCM license would be a route to operating these markets on a clearly regulated, federally approved basis.
Crypto Derivatives
Crypto derivatives, particularly bitcoin and ether futures and options, already trade on CFTC-regulated venues. Blockchain.com entering this space under CFTC oversight would expand the number of regulated access points for retail and institutional users, and would bring the platform's derivatives book squarely within the CFTC's reporting and surveillance perimeter.
Where This Fits in the Broader US Regulatory Picture
The applications come at a consequential moment for US crypto regulation. Congressional efforts to pass a comprehensive crypto market-structure bill have faced delays, and the CFTC has been developing its own rulemaking frameworks for leveraged retail crypto trading and related activities. Blockchain.com's decision to pursue the CFTC route rather than waiting for legislative clarity reflects a practical read of the regulatory landscape: the CFTC's existing statutory authority under the Commodity Exchange Act is sufficient to license derivatives activity, and the agency has signalled openness to new crypto entrants.
The NYSE Agreement and the Wider Strategy
Blockchain.com's regulatory push does not stand alone. The company reached an agreement with the New York Stock Exchange in September to give its users access to ETFs through the exchange's planned digital trading platform. Taken together, the NYSE deal and the CFTC applications sketch a strategy of embedding Blockchain.com into regulated US market infrastructure across multiple asset classes and product types.
The IPO Backdrop
Blockchain.com is also preparing for a potential public listing. Bloomberg reported that the company is targeting an IPO valuation of between $4 billion and $6 billion and is aiming to list before the end of 2026. An earlier report in May had indicated a $500 million IPO target, though more recent figures suggest considerably higher ambitions. The company has been discussing a public listing since at least April 2022, when it held conversations with banks shortly after raising capital at a $14 billion valuation. Regulatory credibility, specifically holding CFTC licences, would materially strengthen the disclosure narrative ahead of any listing and would be a factor in how underwriters and institutional investors assess the business.
Accounting and Tax Implications for Firms and CFOs
For accounting firms advising digital asset businesses, Blockchain.com's CFTC applications are a useful data point on the direction of travel. If approved, they confirm that crypto derivatives and prediction market positions will increasingly sit within a regulated framework that mandates specific accounting treatments.
Derivatives Accounting Under US GAAP and IFRS
Derivatives contracts on a CFTC-regulated venue are subject to ASC 815 under US GAAP and IFRS 9 under international standards. Both frameworks require the entity holding the position to recognise the derivative at fair value on the balance sheet, with changes in fair value flowing through profit or loss unless hedge accounting criteria are met. For clients who start trading crypto derivatives through a newly licensed venue such as Blockchain.com, this means fair value measurements need to be supported by observable market data, a requirement that is more straightforward on a regulated exchange than on an unregulated platform where price discovery is opaque.
Customer Asset Segregation and Audit Considerations
FCM registration requires strict segregation of customer assets. Auditors reviewing a platform holding FCM status will need to confirm that client money accounts are properly identified, that segregation is tested at period end, and that the platform's financial statements correctly exclude customer funds from the firm's own assets. Firms that custody positions through an FCM-registered Blockchain.com would also need to assess whether their own accounting for those positions reflects the legal structure correctly.
Tax Treatment of Regulated Crypto Derivatives
Under current IRS guidance, gains and losses on crypto derivatives may be subject to different tax treatment depending on the contract type. Section 1256 contracts, which cover regulated futures contracts traded on a CFTC-designated contract market, receive the 60/40 blended capital gains treatment and are marked to market at year end. If Blockchain.com's crypto derivatives qualify as Section 1256 contracts once the DCM license is granted, users and their advisers will need to account for the mark-to-market rule, which triggers a taxable event even without a physical close of the position. This is a material compliance consideration for any US taxpayer holding open positions at 31 December.
KYC, AML, and Onboarding Requirements
Operating as a CFTC-regulated FCM and DCM subjects Blockchain.com to Bank Secrecy Act obligations administered through FinCEN, including customer identification programme requirements, suspicious activity reporting, and anti-money laundering programme obligations. For compliance officers at firms that use or advise clients using the platform, this means the onboarding due diligence burden shifts significantly: a CFTC-regulated venue is required to perform its own KYC, which reduces but does not eliminate the need for downstream due diligence by institutional users.
Implications for Crypto Accounting Software and Record-Keeping
The entry of a major platform into CFTC-regulated derivatives creates new data streams that robust crypto accounting software must handle accurately. Regulated derivatives generate mark-to-market entries, margin calls, daily settlement variation, and in some cases physical or cash delivery events, all of which need to be captured at the transaction level and mapped to the correct accounting periods. Firms reviewing their digital asset accounting software stack should confirm that the tools they use can ingest data from CFTC-regulated derivatives venues and apply the correct recognition and measurement rules automatically, reducing the risk of manual error in period-end close.
What to Watch Next
CFTC license applications go through a formal review process that can take months. Key milestones to monitor include any CFTC public notice of the DCM application, the comment period if one is opened, and whether the FCM registration triggers any additional capital or reporting conditions specific to digital assets. The parallel IPO timeline adds urgency: if Blockchain.com wants to list before the end of 2026, it will need regulatory progress to be visible in its prospectus disclosures. For firms advising clients in the derivatives and prediction market space, now is the time to map the accounting and tax treatment of positions that may shift from unregulated to CFTC-regulated status if these applications succeed.
Source: The Block
Frequently Asked Questions
What is a designated contract market license and why does it matter for crypto?
A DCM license, granted by the CFTC under the Commodity Exchange Act, authorises a trading venue to list futures, options on futures, and swaps for US participants. For crypto, it means the platform and its contracts sit within the federal regulatory perimeter, with mandatory surveillance, financial integrity rules, and customer protection standards. Positions traded on a DCM are also more likely to qualify as Section 1256 contracts for US tax purposes, which carries a specific mark-to-market and 60/40 tax treatment.
What does FCM registration require of a crypto platform?
A futures commission merchant must maintain minimum adjusted net capital, segregate customer funds from its own assets, file periodic financial statements with the CFTC, maintain a robust AML programme, and comply with Bank Secrecy Act obligations. For a crypto-native firm, the capital and segregation requirements represent a significant operational shift from running an unregulated exchange.
How would Section 1256 treatment affect US taxpayers trading crypto derivatives on a CFTC-regulated venue?
If a crypto futures contract qualifies as a Section 1256 contract, US taxpayers must mark the position to market at 31 December each year, recognising gain or loss regardless of whether the position is closed. The resulting gain or loss is then split 60% long-term and 40% short-term for capital gains rate purposes. This differs from spot crypto, where gain or loss is only recognised on disposal. Taxpayers moving from unregulated to CFTC-regulated crypto derivatives should review their position with a qualified tax adviser before year end.
Does CFTC regulation of a platform reduce the AML due diligence burden on institutional users?
It reduces but does not eliminate it. A CFTC-regulated FCM must run its own customer identification programme and AML controls, which means the platform performs primary KYC. However, institutional users that are themselves regulated entities, such as broker-dealers or investment advisers, still have independent obligations to conduct counterparty due diligence and may need to document their assessment of the venue's regulatory status as part of their own compliance frameworks.
What should accounting firms do now ahead of a potential CFTC approval?
Firms should identify which of their clients currently hold crypto derivatives or prediction market positions, assess whether those positions would shift to a CFTC-regulated venue if Blockchain.com's applications are approved, and review the accounting and tax treatment that would apply under ASC 815 or IFRS 9 and Section 1256. It is also worth auditing whether the crypto accounting software in use can handle regulated derivatives data feeds, margin accounting, and year-end mark-to-market entries before the transition occurs.