Listing a crypto token on a major exchange can catapult a token from obscurity to highly valuable.
But exchanges’ vetting process for new tokens is a legal minefield. Exchanges’ listing decisions were at the crux of several SEC enforcement actions by the previous administration (notably against Coinbase, Binance, and Kraken) that were settled by the current SEC leadership in 2025.
In my second post about the draft Digital Commodity Intermediaries Act I look at Section 203 of the Act that will govern how exchanges list “digital commodity” tokens.
To list a new token for trading in a cash or spot market, an exchange (or group of exchanges acting jointly) will need to submit to the CFTC a certification and analysis of how the token meets the requirements of the Act. The certification is deemed valid by default and the token will be eligible for listing unless the CFTC gives written notice of disapproval within 20 business days (extendable up to 80 business days). The exchanges will also have to submit tokens for recertification in case of material changes.
The standard of analysis is defined in Section 204 of the draft Act. To be listed, an exchange will need to determine that the “digital commodity”:
Is not readily susceptible to manipulation; and
There has been disclosure to the public about the digital commodity, and the exchange has reasonably determined that the information is correct, current, and available to the public. The public information about the digital commodity must include: the blockchain source code, transaction history, tokenomics, trading volume and volatility, material risk and customer protections, additional relevant information to be required by the CFTC.
The draft Act preserves the exchanges’ responsibility to ensure the integrity of crypto tokens, not the tokens’ developers or maintainers. This makes sense since digital commodities are supposed to exist as code that is not under anyone’s control. But, in reality, it will mean that exchanges will continue to face serious legal risk tied to the tokens that they list, even though they might not have direct access to all the information and rely on the information provided by the teams that draft the initial whitepapers, produce the source code and documentation, and control the tokenomics, release schedule, and other facts that can’t be independently verified onchain. This regulatory structure will maintain exchanges’ role as the gatekeepers who decide what token can be traded (and charge hefty fees or token allocations for the privilege). The Act does not give token developers a path to certify their tokens for trading in the US across all exchanges. So this process could keep many good tokens out of reach of US investors due to the high bar that crypto projects will need to pass to be listed for trading in the US.
Analysis is based on a draft that could change before becoming law. Not legal advice.
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