Commodity Futures Trading Commission (CFTC)

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The CFTC regulates U.S. derivatives markets.

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The Commodity Futures Trading Commission (CFTC), established in 1974, is an independent U.S. federal agency based in Washington, D.C. The CFTC is responsible for regulating futures, options on futures, and OTC derivatives (“swaps”) markets.

Its role is similar to that of the Securities and Exchange Commission (SEC), which oversees the U.S. bond and equity markets. Both regulators apply extensive, complex rules systems; have the authority to levy fines and sanctions; and oversee markets with the goal of preventing fraud, manipulation, and abusive practices. In practice, the CFTC’s mandate centers on keeping derivatives markets orderly, resilient, and fair.

According to the agency, its mission is to promote the integrity, resilience, and vibrancy of U.S. derivatives markets—an objective that has grown more complicated as futures trading has expanded far beyond its agricultural commodity roots into global financial and digital markets.

Futures markets as we know them today predate the CFTC by well over a century. Around 1848, a group of grain merchants formed the Chicago Board of Trade (CBOT) to buy and sell wheat—and eventually other crops like corn, soybeans, and rice—using what became known as futures contracts. These contracts included standardized specifications (aka, “specs”) on the quality and quantity of the grain and other obligations that both buyers and sellers were required to uphold.

Standardization made futures contracts useful to a wide range of participants. Farmers could lock in a price for their harvest. Grain millers could book supplies months in advance, or hedge risks such as drought or supply chain disruption. Speculators could take positions based on whether they believed prices would rise or fall.

Futures eventually expanded far beyond their agrarian roots. In addition to grain futures, the CFTC today regulates futures and options markets based on:

While futures markets benefited participants and the public in many ways, they also gained a reputation for manipulation and abuse. In the CBOT’s early decades, the exchange became notorious for “cornering” schemes, in which traders would buy up large quantities of a commodity to artificially drive up prices before selling at a profit.

Such practices distorted prices, disrupted markets, and undermined confidence among producers, consumers, and other market participants. Although the CBOT formally banned cornering practices in 1868, manipulation attempts persisted, and meaningful federal oversight did not emerge until the early 20th century.

The federal government began regulating futures markets in 1921 with the passage of the Futures Trading Act, which was introduced in response to concerns about market manipulation and excessive speculation in commodities such as wheat, corn, and cotton. The law imposed a tax on grain futures contracts and required that such contracts be traded on designated exchanges. However, the law was declared unconstitutional in 1922.

Later that year, Congress passed the Grain Futures Act, which attempted to address the constitutional snags of its predecessor. The act established the Grain Futures Administration (GFA), which focused on regulating grain futures markets to prevent manipulation and fraud. In 1936 the GFA was replaced by the Commodity Exchange Act (CEA), which expanded federal regulation to include a broader range of commodities beyond grains and introduced stricter rules to prevent abusive practices. It established the legal framework that continues to govern U.S. futures trading today.

Congress passed the Commodity Futures Trading Commission Act of 1974, which was signed into law by President Gerald Ford. The legislation overhauled the CEA and created the CFTC, granting the new agency exclusive jurisdiction over futures trading in all commodities.

The CFTC is led by five commissioners (including a chair), most of whom have extensive backgrounds in law, finance, or financial regulation. All are appointed by the president of the United States, with the advice and consent of the Senate, to serve staggered five-year terms. No more than three commissioners may belong to the same political party at any one time. In December 2025, Michael S. Selig was sworn in as the 16th chair of the CFTC; he previously served as chief counsel of the SEC’s Crypto Task Force.

The CFTC was created just ahead of a period of rapid growth in the futures industry. What began largely as markets for agricultural commodities expanded into increasingly complex financial contracts tied to interest rates, foreign currencies, and equity indexes. Over time, globalization and financial innovation led to additional responsibilities and challenges for the CFTC. As of 2026, futures and options markets collectively see well over $1 trillion in notional value traded each day.

Following the 2008 financial crisis and the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFTC’s responsibilities expanded significantly. The agency was given authority to regulate large portions of the swaps market, previously an over-the-counter market with little direct federal oversight. The CFTC also oversees the National Futures Association (NFA), a self-regulatory organization for the U.S. derivatives industry.

The CFTC enforces the CEA and its own regulations primarily through its Division of Enforcement, which investigates and prosecutes misconduct in futures, options on futures, and swaps markets. The agency’s enforcement tools include:

The CFTC also collaborates with other federal and international regulators to address cross-border activity and complex financial crimes. For example, the agency has worked with the Department of Justice and the SEC on cases involving market manipulation and fraud.

The creation of the CFTC did not end attempts to manipulate commodity and derivatives markets. Since its inception in 1974, the agency has pursued a number of high-profile enforcement cases involving illegal, reckless, or abusive trading practices. Notable examples include:

The CFTC also plays a role in regulating certain aspects of cryptocurrency markets—specifically, digital assets it classifies as commodities, including Bitcoin and Ether. In practice, this gives the agency authority over crypto futures, swaps, and perpetual futures traded in the U.S. 

The agency has limited oversight of spot crypto markets (the cryptocurrency itself), but it has taken enforcement actions against alleged fraudulent schemes and unregistered platforms operating in crypto. For example, in 2021, the CFTC fined Tether and Bitfinex a combined $42.5 million for misleading claims about the reserves backing the Tether stablecoin.

More broadly, cryptocurrency regulation remains unsettled and continues to evolve. Ongoing debates over whether certain digital assets should be treated as securities or commodities have created areas of overlap—and occasional tension—between the CFTC and the SEC. These jurisdictional questions have fueled periodic discussions about consolidating oversight or even merging the two agencies.

While the idea of a CFTC–SEC merger has circulated for decades, it has gained renewed attention alongside the rapid growth of crypto markets and shifting regulatory priorities. Still, any merger would require congressional approval, making such a move unlikely in the near term.