An offshore broker generally needs Commodity Futures Trading Commission (CFTC) registration the moment it solicits or accepts orders from customers located in the United States for futures, options on futures, swaps, retail foreign exchange or leveraged commodity transactions, no matter where the firm is incorporated or where its servers sit. The Commodity Exchange Act (CEA) looks at the location of the customer, not the broker, and the exemption in CFTC Regulation 3.10(c) for foreign intermediaries is available only to firms that deal exclusively with persons outside the United States. Offshore brokers soliciting U.S. customers without registration make up the largest group of names on the CFTC’s Registration Deficient List.
The Commodity Exchange Act follows the U.S. customer, not the broker
CEA Section 4(a) makes it unlawful to offer or enter into a futures contract with a U.S. person unless the contract is made on or subject to the rules of a designated contract market or a foreign board of trade operating under CFTC rules. Section 4d requires anyone who solicits or accepts orders for futures and accepts customer money to register as a futures commission merchant (FCM), and Section 4k requires the individuals who solicit to register as associated persons. Introducing brokers, commodity pool operators and commodity trading advisors have their own registration provisions, and registrants generally must be members of the National Futures Association (NFA).
None of those provisions contains a geographic carve out for the broker. A firm in Cyprus, Dubai or the Caribbean that advertises to U.S. residents, opens accounts for them or accepts their wire transfers is generally subject to the same registration requirements as a firm in Chicago. Websites in English that accept U.S. identification documents and U.S. payment methods are the usual evidence the CFTC relies on.
The Regulation 3.10(c) exemption for foreign intermediaries with no U.S. customers
Regulation 3.10(c) exempts a foreign FCM, IB, CPO or CTA from registration when it acts only on behalf of persons located outside the United States and submits any transactions on U.S. markets for clearing on an omnibus basis through a registered FCM. The exemption is lost if the firm takes a single U.S. customer, and the CFTC reads the location test by reference to where the customer actually is, not the customer’s citizenship or the address typed on an account form.
The practical safe harbor is a firm that blocks U.S. internet traffic, rejects U.S. addresses and identification at onboarding, refuses wires from U.S. banks and trains its sales staff not to respond to U.S. inquiries. A firm that does those things and clears through a registered FCM can generally serve the rest of the world from offshore without registering.
Foreign futures and options for U.S. customers under Part 30
Part 30 of the CFTC regulations governs the offer and sale of foreign futures and options to U.S. customers. Regulation 30.4 requires a firm that solicits or accepts U.S. customer orders for foreign futures to register as an FCM. Regulation 30.5 allows foreign firms that act as IBs, CPOs or CTAs for U.S. customers to obtain an exemption by filing through NFA and appointing an agent for service of process. Regulation 30.10 lets a foreign broker regulated by a comparable home regime apply for an order permitting it to deal with U.S. customers without FCM registration, and firms in several jurisdictions operate under those orders today.
A foreign exchange itself generally does not register as a DCM. It registers as a foreign board of trade under Part 48 if it wants to give U.S. members direct electronic access, and its U.S. customers still trade through registered or exempt intermediaries.
Retail forex and leveraged crypto offered to U.S. residents from offshore
CEA Section 2(c)(2)(B) limits who may act as counterparty to a retail forex customer in the United States to a short list of regulated entities, including a registered FCM or retail foreign exchange dealer. CEA Section 2(c)(2)(D) treats a leveraged, margined or financed commodity transaction with a retail customer as if it were a futures contract unless the commodity is actually delivered within 28 days, and the CFTC has applied that provision to leveraged bitcoin trading in enforcement actions since 2016 and in its 2020 actual delivery guidance. An offshore platform that offers U.S. residents margined crypto or forex trading without registration generally violates one or both provisions, and the CFTC has brought federal court actions against offshore platforms on exactly that theory.
The CFTC’s May 2026 perpetual contracts package also matters here. Staff indicated that digital commodity perpetuals offered by offshore exchanges may be treated as foreign futures, which pulls them into the Part 30 framework rather than leaving them in a gray area.
How the CFTC finds offshore firms and what NFA Members must do
The CFTC maintains the Registration Deficient List, known as the RED list, which names foreign entities that appear to be soliciting U.S. customers without registration. Inclusion on the list is not an enforcement action, but it is a public warning that payment processors, liquidity providers and U.S. partners act on. The CFTC also pursues offshore firms in federal court, where it has obtained default judgments, disgorgement orders and permanent trading bans against firms that never appeared.
NFA Bylaw 1101 prohibits every NFA Member from carrying an account for, accepting an order from or doing business with a non member that is required to register and has not. A U.S. FCM that clears for an offshore broker which quietly takes U.S. customers is exposed under that bylaw, which is why clearing FCMs ask for written representations about customer location. Shipkevich PLLC advises offshore firms on structuring for the Regulation 3.10(c) exemption, on Part 30 relief and on full registration when the U.S. market is the goal.
Frequently asked questions
Can an offshore forex or futures broker accept U.S. customers without CFTC registration?
Generally no. A firm that solicits or accepts orders from customers located in the United States generally must register with the CFTC and join NFA, regardless of where it is incorporated. Retail forex counterparties must be registered FCMs, retail foreign exchange dealers or other regulated entities listed in CEA Section 2(c)(2)(B), and futures intermediaries must register under Section 4d or qualify for Part 30 relief.
What is the CFTC Regulation 3.10(c) exemption?
It exempts a foreign FCM, IB, CPO or CTA from CFTC registration when the firm acts only for persons located outside the United States and submits any U.S. market transactions for clearing through a registered FCM. Taking a single U.S. customer defeats the exemption. The test looks at where the customer is located, not at citizenship.
What is the CFTC RED list?
The Registration Deficient List is a public list of foreign entities that appear to be soliciting U.S. customers for futures, options, forex or leveraged commodity transactions without CFTC registration. Being listed is not an enforcement action, but it signals to banks, processors and counterparties that the firm is operating unlawfully in the U.S. market. A listed firm can address the problem by registering or by showing that it does not solicit U.S. customers.
Does offering leveraged crypto trading to U.S. residents from offshore require CFTC registration?
Generally yes. CEA Section 2(c)(2)(D) treats leveraged, margined or financed commodity transactions with retail customers as futures unless actual delivery occurs within 28 days, and bitcoin and ether are commodities. An offshore platform offering those products to U.S. residents generally must register or block them.
To discuss how these rules apply to your company, contact Shipkevich PLLC.