TLDR
- CFTC replaces legacy systems with Nasdaq tech to detect abuse in crypto markets.
- Nasdaq’s platform spans 12 asset classes including prediction markets.
- Lawmakers consider CLARITY Act to give CFTC wider crypto jurisdiction.
- Nasdaq system already supports 50 exchanges and 20 regulators worldwide.
The U.S. Commodity Futures Trading Commission (CFTC) has turned to Nasdaq’s surveillance technology to modernize its market monitoring efforts. The decision reflects the regulator’s intent to strengthen oversight of crypto assets and prediction markets amid rising trading volumes and rapid innovation. Officials said the move replaces outdated tools and positions the agency for a more active role in safeguarding market integrity.
CFTC Integrates Nasdaq’s Surveillance Platform
The CFTC confirmed Wednesday that it will adopt Nasdaq’s Market Surveillance system to monitor trading across digital and traditional asset classes. The platform, already in use by more than 50 global exchanges and regulators, provides real-time alerts and cross-market analytics.
Agency leaders described the system as a significant upgrade from its older infrastructure, which dates back decades. According to Acting Chair Caroline Pham, the new system ensures the regulator remains ahead as markets evolve.
Automated monitoring and access to comprehensive order book data will allow the CFTC to detect fraud, manipulation, and abusive practices more effectively.
Nasdaq said its program was designed to track trading across various markets, including crypto and event-based products. A spokesperson noted that prediction markets closely resemble derivatives, which fall squarely within the CFTC’s historical mandate.
Regulatory Shifts Expand CFTC Authority
Furthermore, lawmakers in Washington are debating the CLARITY Act, a bill that could redefine how digital assets are regulated in the United States. The legislation, passed by the House of Representatives in July, would place most cryptocurrencies under the CFTC’s jurisdiction by classifying them as commodities.
If enacted, the measure would expand the regulator’s role considerably, requiring registration of crypto exchanges, brokers, and dealers. It would also establish new compliance, reporting, and anti-money laundering standards. The proposed framework marks a potential shift away from the Securities and Exchange Commission’s oversight of many tokens.
At the same time, the CFTC faces staffing challenges, with multiple commissioners preparing to depart once a new chair is confirmed. Despite resource strains, the agency continues to accelerate initiatives aimed at adapting its supervision to the scale of modern markets.
Surveillance to Address Evolving Market Risks
In addition, the CFTC noted that continuous trading and complex digital infrastructure present new risks not present in earlier decades. Nasdaq’s technology provides tools designed to scale during periods of heightened volatility and detect unusual patterns across markets.
The regulator emphasized that access to detailed trading data is critical to preventing abuse in both crypto and traditional products. Market surveillance will now include the capacity to identify manipulative behavior at the transaction level.
Earlier this month, the CFTC launched its “Crypto Sprint,” an initiative focused on implementing recommendations from the President’s Working Group on Digital Asset Markets. The project includes developing rules for futures trading and examining how intermediaries handle digital commodities. Officials said the sprint aims to move quickly on oversight reforms recommended by the White House.
Industry Oversight Remains a Challenge
Even so, the Commission acknowledged that innovation in financial markets continues at a pace that challenges existing regulatory frameworks. Crypto exchanges, prediction markets, and other trading venues often operate globally, raising jurisdictional questions.
The adoption of Nasdaq’s system is intended as one step toward addressing these challenges. By leveraging advanced technology already deployed internationally, the CFTC expects to improve its ability to respond to misconduct in real time.
Still, broader regulatory clarity depends on legislation pending in Congress. Until laws define agency responsibilities more clearly, overlap and uncertainty may persist. Market participants remain focused on whether the CFTC will gain exclusive authority over non-security digital assets in the months ahead.
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