On September 24, CFTC staff released updates to its FAQs on registrant and registered entity activities involving crypto assets and blockchain technologies. The FAQs were first issued March 20 to clarify December 2025 staff guidance on tokenized collateral and a related staff no-action position on digital assets accepted as margin (previously covered by InfoBytes here). In a new response, staff said futures commission merchants and derivatives clearing organizations may invest customer funds in tokenized forms of investments permitted under CFTC Regulation 1.25, provided they can demonstrate that the underlying asset is itself a permitted investment and that the token conveys legal and economic rights that are the same as, or “functionally equivalent” to, those of the traditional asset. The investment must also satisfy the rule’s other terms, including requirements related to liquidity, concentration limits, and time-to-maturity, and the tokens must be held with an acceptable depository. For tokenized forms of eligible government money market funds, staff said they would also expect a written acknowledgment letter from the custodian.

In an updated response on uncleared swaps, staff said crypto assets, including payment stablecoins, remain ineligible as margin. They added that the CFTC would not object to tokenized money market fund shares serving as initial or variation margin if the underlying fund qualifies, the tokens convey the same or functionally equivalent rights, and all other applicable requirements are met. Staff also said CFTC Regulations 1.31 and 45.2 are technology neutral, so they would not object to firms subject to those rules using blockchain or distributed ledger technology to create and maintain onchain records, provided the firms fully meet the rules’ requirements, including through systems and controls that ensure records are authentic and reliable. Staff added that entities should consider the implications for their risk management frameworks and existing policies and procedures. Staff would not object solely because an entity elects not to keep offchain copies of its records. Entities using public and permissionless blockchains, however, should have systems and controls to retain and produce records under any circumstances, including if the network or its block explorer is unavailable.