On May 28, 2025, the Commodity Futures Trading Commission (CFTC) staff issued interpretive guidance providing critical clarity for offshore entities engaged in digital asset and derivatives trading. The guidance confirms that a non-U.S. entity with certain ties to the U.S.—such as shared ownership or services agreements with U.S.-based affiliates—will not automatically be deemed a “U.S. person” under the CFTC’s jurisdiction, so long as the entity’s place of organization and principal place of business remain outside the United States.

This interpretation follows market confusion after a 2024 enforcement action appeared to expand the CFTC’s jurisdiction based on indirect U.S. ties. The new guidance outlines specific factors the staff considered, including location of high-level management, ownership structure, and functional independence from U.S. trading affiliates.

The guidance reduces the regulatory risk that non-U.S. funds and platforms face when transacting with U.S.-linked counterparties, potentially broadening access to offshore trading venues and liquidity.