T
The Bitcoin Act
Guest
Few lines in federal commodities law are as strange as the one that carves out onions. Caroline Pham, the former Acting Chair of the Commodity Futures Trading Commission, has turned that oddity into a policy argument.
Speaking in an interview at Token2049 Singapore, Pham said the Commodity Exchange Act is drafted so broadly that “pretty much everything is a commodity except for onions and movie box office receipts.” Her conclusion follows directly. The CFTC, in her view, does not need Congress to regulate crypto.
Pham now serves as chief legal officer and chief administrative officer at MoonPay. Her remarks come at a moment when that argument is no longer theoretical.
The exclusions Pham describes are written into the statute itself. The definition of “commodity” in the Commodity Exchange Act covers a long list of agricultural goods and then reaches all other goods, articles, services, rights and interests in which futures contracts are or may be dealt. Onions and motion picture box office receipts are expressly carved out.
That structure is the foundation of her thesis. Pham described the CFTC’s framework as principles based and flexible by design, intended to absorb new kinds of commodities as markets invent them. She offered AI compute as an example, noting that participants are now looking at derivatives on compute capacity and calling that precisely the sort of development the framework was meant to anticipate.
For bitcoin, the implication is straightforward. A definition that sweeps in nearly every good, service and interest leaves little room to argue that bitcoin falls outside it. The question is less whether the CFTC can reach bitcoin markets than how far, and through which provisions.
Context explains the timing. The CLARITY Act failed last month, and much of the industry has since redirected its attention toward agency rulemaking, even as some continue to press for legislation.
The CFTC under Chairman Michael Selig has been moving on that front. Its most recent step is an advance notice of proposed rulemaking on Regulation CAM and Regulation CTX. The agency has said the effort would establish a federal framework for leveraged retail crypto transactions as an alternative to state licensing.
Pham characterized the proposal as a continuation of the CFTC Crypto Sprint she launched in 2025. That initiative, which included a push to list spot crypto on CFTC registered exchanges, led to the first ever trading of spot crypto on those venues.
The legal engine behind both efforts is not new. It is a 2010 provision from the Dodd-Frank Act, now codified at section 2(c)(2)(D) of the Commodity Exchange Act, which requires leveraged, margined or financed retail commodity transactions to take place on a regulated exchange.
For years, the agency did not enforce that requirement. The Crypto Sprint relied on it, and the Regulation CAM and CTX notice builds on the same statutory ground.
This is the part sophisticated readers should focus on. Pham’s case is not that the CFTC should invent new powers. It is that the powers already sit in the statute and were simply left unused. That is a stronger legal position than a claim of novel authority, because it rests on text Congress has already enacted.
Pham was direct about the policy rationale. She said this is the kind of protection retail crypto traders in the United States should have, and that placing these transactions on a strongly regulated exchange beats leaving them to a patchwork of different laws.
The practical consequence centers on leverage. A retail trader who buys bitcoin outright and a retail trader who buys bitcoin with borrowed funds are, under this reading, in different legal worlds. The second transaction is the one the statute pushes onto a regulated exchange.
The federal framework the agency describes would offer an alternative to state licenses for those leveraged transactions. For platforms serving bitcoin traders nationwide, a single federal route is a meaningful change from a state by state map.
There is a tradeoff worth naming. A framework assembled through agency rulemaking can move faster than legislation, but it also rests on the agency’s continued reading of its own statute. A rule built by one commission can be revisited by the next. Legislation would have offered a more durable foundation, which is part of why some in the industry still favor it. That observation is analysis, not something Pham said, but it frames the stakes of the path the industry has now taken.
Pham also addressed settlement, and one strand of her reasoning will sound familiar to anyone who understands why bitcoin exists.
She argued that the industry overestimates what stablecoins can do in wholesale markets. By her calculation, settling a single trading day atomically and in real time on a blockchain would require about $15 trillion in cash, a sum she said does not exist to change hands in one day. Banks handle that volume through net settlement, offsetting obligations and exchanging only the residual, and Pham said tokenized deposits will be essential there.
The more interesting part of her answer is where she placed blockchain settlement instead. She said stablecoins are most useful when counterparties do not know or trust each other, or when the goal is to remove settlement risk by delivering the asset and the cash at the same moment.
That is, in substance, the problem bitcoin was designed to solve: final settlement between parties who have no reason to trust one another and no intermediary to rely on. Pham did not make that comparison herself. But her framing draws a clear line between systems built on trusted netting and systems built for trustless finality, and bitcoin sits firmly on the second side of that line.
None of this is settled law yet. An advance notice is the earliest stage of the rulemaking process. It signals intent and invites input before any proposed rule exists, let alone a final one. The substance of Regulation CAM and CTX can still change considerably.
What Pham’s comments make clear is the theory the industry is now betting on. With the CLARITY Act out of the picture for now, the working assumption is that the Commodity Exchange Act, read broadly and enforced as written, can carry most of the weight Congress declined to take on.
Whether that assumption holds will depend on how the CFTC drafts its rules, how courts read the statute if those rules are challenged, and whether future commissions share the current one’s view. For bitcoin markets, the outcome will shape where leveraged trading happens and who supervises it.
The onion carve**-**out began as a historical footnote. It is now the frame for one of the more consequential jurisdictional arguments in U.S. crypto policy.
Author’s note: This article is commentary and analysis for informational purposes only. It is not legal advice, and nothing here is written in a professional capacity. Readers should consult qualified counsel about their specific circumstances.
Speaking in an interview at Token2049 Singapore, Pham said the Commodity Exchange Act is drafted so broadly that “pretty much everything is a commodity except for onions and movie box office receipts.” Her conclusion follows directly. The CFTC, in her view, does not need Congress to regulate crypto.
Pham now serves as chief legal officer and chief administrative officer at MoonPay. Her remarks come at a moment when that argument is no longer theoretical.
A Definition Built to Stretch
The exclusions Pham describes are written into the statute itself. The definition of “commodity” in the Commodity Exchange Act covers a long list of agricultural goods and then reaches all other goods, articles, services, rights and interests in which futures contracts are or may be dealt. Onions and motion picture box office receipts are expressly carved out.
That structure is the foundation of her thesis. Pham described the CFTC’s framework as principles based and flexible by design, intended to absorb new kinds of commodities as markets invent them. She offered AI compute as an example, noting that participants are now looking at derivatives on compute capacity and calling that precisely the sort of development the framework was meant to anticipate.
For bitcoin, the implication is straightforward. A definition that sweeps in nearly every good, service and interest leaves little room to argue that bitcoin falls outside it. The question is less whether the CFTC can reach bitcoin markets than how far, and through which provisions.
Why the Argument Matters Now
Context explains the timing. The CLARITY Act failed last month, and much of the industry has since redirected its attention toward agency rulemaking, even as some continue to press for legislation.
The CFTC under Chairman Michael Selig has been moving on that front. Its most recent step is an advance notice of proposed rulemaking on Regulation CAM and Regulation CTX. The agency has said the effort would establish a federal framework for leveraged retail crypto transactions as an alternative to state licensing.
Pham characterized the proposal as a continuation of the CFTC Crypto Sprint she launched in 2025. That initiative, which included a push to list spot crypto on CFTC registered exchanges, led to the first ever trading of spot crypto on those venues.
The Dodd-Frank Provision Doing the Work
The legal engine behind both efforts is not new. It is a 2010 provision from the Dodd-Frank Act, now codified at section 2(c)(2)(D) of the Commodity Exchange Act, which requires leveraged, margined or financed retail commodity transactions to take place on a regulated exchange.
For years, the agency did not enforce that requirement. The Crypto Sprint relied on it, and the Regulation CAM and CTX notice builds on the same statutory ground.
This is the part sophisticated readers should focus on. Pham’s case is not that the CFTC should invent new powers. It is that the powers already sit in the statute and were simply left unused. That is a stronger legal position than a claim of novel authority, because it rests on text Congress has already enacted.
Pham was direct about the policy rationale. She said this is the kind of protection retail crypto traders in the United States should have, and that placing these transactions on a strongly regulated exchange beats leaving them to a patchwork of different laws.
What It Means for Bitcoin Traders
The practical consequence centers on leverage. A retail trader who buys bitcoin outright and a retail trader who buys bitcoin with borrowed funds are, under this reading, in different legal worlds. The second transaction is the one the statute pushes onto a regulated exchange.
The federal framework the agency describes would offer an alternative to state licenses for those leveraged transactions. For platforms serving bitcoin traders nationwide, a single federal route is a meaningful change from a state by state map.
There is a tradeoff worth naming. A framework assembled through agency rulemaking can move faster than legislation, but it also rests on the agency’s continued reading of its own statute. A rule built by one commission can be revisited by the next. Legislation would have offered a more durable foundation, which is part of why some in the industry still favor it. That observation is analysis, not something Pham said, but it frames the stakes of the path the industry has now taken.
A Point on Settlement Bitcoiners Will Recognize
Pham also addressed settlement, and one strand of her reasoning will sound familiar to anyone who understands why bitcoin exists.
She argued that the industry overestimates what stablecoins can do in wholesale markets. By her calculation, settling a single trading day atomically and in real time on a blockchain would require about $15 trillion in cash, a sum she said does not exist to change hands in one day. Banks handle that volume through net settlement, offsetting obligations and exchanging only the residual, and Pham said tokenized deposits will be essential there.
The more interesting part of her answer is where she placed blockchain settlement instead. She said stablecoins are most useful when counterparties do not know or trust each other, or when the goal is to remove settlement risk by delivering the asset and the cash at the same moment.
That is, in substance, the problem bitcoin was designed to solve: final settlement between parties who have no reason to trust one another and no intermediary to rely on. Pham did not make that comparison herself. But her framing draws a clear line between systems built on trusted netting and systems built for trustless finality, and bitcoin sits firmly on the second side of that line.
The Limits of the Agency Path
None of this is settled law yet. An advance notice is the earliest stage of the rulemaking process. It signals intent and invites input before any proposed rule exists, let alone a final one. The substance of Regulation CAM and CTX can still change considerably.
What Pham’s comments make clear is the theory the industry is now betting on. With the CLARITY Act out of the picture for now, the working assumption is that the Commodity Exchange Act, read broadly and enforced as written, can carry most of the weight Congress declined to take on.
Whether that assumption holds will depend on how the CFTC drafts its rules, how courts read the statute if those rules are challenged, and whether future commissions share the current one’s view. For bitcoin markets, the outcome will shape where leveraged trading happens and who supervises it.
The onion carve**-**out began as a historical footnote. It is now the frame for one of the more consequential jurisdictional arguments in U.S. crypto policy.
Author’s note: This article is commentary and analysis for informational purposes only. It is not legal advice, and nothing here is written in a professional capacity. Readers should consult qualified counsel about their specific circumstances.