How to check a crypto trading platform with the CFTC and NFA before you trade

Crypto futures, options, leveraged contracts and some prediction markets fall under the Commodity Futures Trading Commission (CFTC) in the US. Firms that offer them to the public generally have to register, and there are free tools to check. This guide explains how to use them, and when you need a different check instead.

For spot exchanges, where you buy and sell crypto itself, see how to check a crypto exchange is registered. For how derivatives work, see crypto leverage and derivatives rules.

Which products the CFTC covers

The CFTC’s “check before you trade” page says that products that use virtual currencies as the underlying commodity are regulated by the CFTC. That includes things like:

• futures and options on bitcoin, ether and other crypto;
• leveraged or margined crypto contracts;
• event contracts on regulated prediction markets. See prediction markets explained.

The same page notes the limit: spot crypto trading platforms are not required to register with the CFTC. They register with FinCEN as money services businesses and may need state licenses.

Who has to register

The CFTC lists the intermediaries you’ll most often meet:

The National Futures Association (NFA) says it regulates every firm and individual that conducts futures trading business with the investing public. The CFTC says registration and examination of intermediaries are carried out by the NFA on its behalf, under its supervision.

Step 1: search NFA BASIC

The CFTC sends investors to the NFA’s Background Affiliation Status Information Center (BASIC). There you can check:

• registration: whether the firm or person is registered, and in which category;
• disciplinary or regulatory history: the NFA says BASIC covers actions taken by the NFA, the CFTC and all US futures exchanges;
• financial information for some firms.

Check the principals too. The CFTC points out that a firm may have no disciplinary history while one of the people running it was disciplined at another firm.

If you can’t find the firm, the CFTC’s advice is short: ask them why, and check with other regulators if needed.

Step 2: check the RED List

The CFTC keeps a Registration Deficient List, or RED List: names of foreign firms that appear to be acting in a capacity that requires CFTC registration, but aren’t registered. The CFTC says these firms often operate in binary options, forex, digital currencies, commodity pools and precious metals.

Two cautions from the CFTC:

• being on the list doesn’t prove a firm broke the law, but it’s a reason for caution;
• not being on the list doesn’t mean a firm is registered. Always check BASIC as well.

Step 3: check where the trading happens

Regulated futures and options trade on CFTC-designated exchanges, called designated contract markets. The CFTC’s prediction markets guidance gives the same advice for event contracts: only trade with CFTC-registered entities, and avoid unregulated or offshore platforms, where you may have little or no protection.

Spot exchanges: the other checks

For platforms where you simply buy and sell crypto, the CFTC’s own page points you elsewhere. It recommends checking:

• FinCEN’s MSB Registrant Search, because spot platforms must register with FinCEN as money services businesses;
• the Nationwide Multistate Licensing System (NMLS), which shows state licenses.

In New York, there’s also the state’s own license for crypto businesses. See New York’s BitLicense explained.

A platform may offer spot trading through one company and derivatives through another. If so, check each legal entity for the product you’re using.

An example

Say an app advertises bitcoin trading with 20x leverage to US customers. That’s a leveraged derivative, not spot buying, so it falls on the CFTC side. Before depositing:

1. Find the legal name of the company offering the leveraged product, usually in the terms of service.
2. Search it on NFA BASIC. If it isn’t there, ask the company why, as the CFTC suggests.
3. Check the RED List for the name and any trading names.
4. If the company is offshore and unregistered, the CFTC’s guidance is to avoid it.

Red flags

The CFTC’s guidance highlights warning signs such as:

• firms that can’t be found on BASIC, or whose name doesn’t exactly match the registered one;
• unregulated or offshore platforms, where you may have little or no protection;
• promises of big payoffs or free money, celebrity endorsements and glowing reviews;
• tips from people you’ve just met online;
• gimmicks that encourage you to risk more than you intended.

The CFTC’s summary is worth remembering: registration won’t protect you from fraud on its own, but most scams involve unregistered entities, people and products. See AI trading bot scams and pig butchering scams.

A quick checklist

1. Identify what you’d be trading: spot crypto, or a derivative such as futures, options or event contracts.
2. For derivatives, search the firm and its principals on NFA BASIC.
3. Check the RED List.
4. Confirm the exact legal name matches the website and the contract you’re signing.
5. For spot exchanges, check FinCEN and state licenses instead.
6. If anything doesn’t add up, don’t send money.

If something goes wrong

The CFTC and NFA both take complaints about futures firms. For problems with a spot exchange, the CFPB accepts complaints about virtual currency services. See how to complain about a crypto exchange.