The onion thing is not a joke. Hear me out. In American commodity law there are exactly two assets that Congress has explicitly carved out of CFTC jurisdiction by statute — yellow onions and motion picture box office receipts — and the fact that former acting chair Caroline Pham now reaches for both of them as the definitional outer boundary of her agency's authority is, I think, the single most honest framing any CFTC principal has offered on digital asset oversight in the Dodd-Frank era. The reach is enormous. The exclusions are weirdly specific. How did we get here?
September 1958: Congress Bans Onion Futures and Writes a Carve-Out Into Law
The Onion Futures Act is one of those statutes you read once and never forget. Signed by President Eisenhower in August 1958, it did something Congress had never done before and has done exactly once since — it reached into the Commodity Exchange Act and told the regulator, with specific statutory language, that one particular agricultural product was off the board. Permanently. No futures contracts on yellow onions. Not now, not later, not under any amended rule the agency might otherwise want to write.
The backstory is almost comic if you squint. Two speculators on the Chicago Mercantile Exchange — the names most frequently cited in the historical record are Sam Siegel and Vincent Kosuga — had cornered the onion market in late 1955. They held so much physical inventory in Chicago cold storage that the futures price collapsed into territory where a 50-pound bag of onions was worth less than the bag itself. Michigan onion farmers testified in Congress that the whole supply chain had been reduced to a casino run on the backs of a seasonal crop that could not be stored indefinitely.
What matters for the Pham framing in 2026 is the structural precedent. Congress did not grant the agency a general discretionary power to exclude commodities. Congress named a specific one. The statute reads as a scar — evidence that the derivatives market can be gamed hard enough on a thinly-traded underlying that the political system will respond by amputating the entire contract class. The onion exclusion is the only food commodity in the United States that cannot be the subject of a futures contract. Every other agricultural product — soybeans, pork bellies, orange juice concentrate — remains fair game. Yellow onions sit alone, outside the perimeter, by name.
July 2010: Dodd-Frank Hands the CFTC the Swaps Market and a Jurisdictional Mandate
Dodd-Frank is the hinge. Before July 2010 the CFTC was effectively the regulator of listed futures and options on US-registered exchanges, which is a meaningful but bounded remit. After Dodd-Frank the agency inherited the entire US swaps market — a notional pool that, measured by the Bank for International Settlements survey data that circulated during the hearings, was an order of magnitude larger than the equities market the SEC supervised. Title VII of the Act redefined the CFTC's jurisdictional posture from venue-regulator to activity-regulator across any instrument that could be structured as a commodity-reference swap.
And here is the part that reads differently now than it did in 2010. The statutory definition of "commodity" under the Commodity Exchange Act is broad to the point of being almost circular — it covers agricultural goods specifically enumerated, and then everything else that is or could be the subject of a futures contract, with the two carve-outs we have been talking about. Dodd-Frank did not narrow that definition. It expanded the agency's reach into derivatives written on anything that fits inside it. Which, read literally, is almost everything.
The agency started treating this authority as a working theory of the case within a year. Rate swaps, credit default swaps, FX non-deliverables, agricultural swaps, energy swaps — all pulled under registered-swap-dealer regimes and clearinghouse rules. The intellectual move the general counsel's office made during that period, and which I think is underappreciated outside commodity-law circles, is that it treated the two statutory exclusions not as embarrassments but as proof of the general rule. If Congress needed to carve out onions and box office receipts by name, the implication is that absent such carve-outs, every other asset class in existence falls inside the perimeter. Negative inference. It is the kind of argument that lawyers love and journalists usually ignore.
That inference is what the Pham framing in 2026 is quietly leaning on.
2010 Onward: The Box Office Futures Fight and the Second Statutory Exclusion
The second carve-out is weirder than the onion one, and it happened in slow motion inside Dodd-Frank itself. In 2008 and 2009, two separate exchange proposals surfaced to list futures contracts on domestic motion picture box office receipts. The Cantor Exchange had one design — binary contracts settling on opening-weekend domestic gross for a named title. Media Derivatives, out of Phoenix, had a different design on the same underlying. Both filed with the CFTC during the final year of the Bush-era review schedule and both ran into a wall built by the Motion Picture Association of America and the major studios.
The studios' argument was not primarily about hedging. The studios already managed box office risk through foreign pre-sales, insurance, and co-financing structures that had been built over four decades. The argument was about information. A liquid futures contract on opening-weekend receipts would create a public forward curve for every film in production, and that curve — not the trailer, not the test screenings, not the private tracking data that studios paid Reuters-adjacent vendors to generate — would be the price signal that moviegoers, exhibitors, and ad buyers used to decide whether the title was going to work.
Congress sided with the studios. Section 721 of Dodd-Frank, which otherwise is a technical definitions section, inserted language banning any futures or options contract based on motion picture box office receipts. The CFTC can regulate derivatives on cattle, hog carcasses, uranium concentrate, and credit protection on the sovereign debt of foreign governments. It cannot regulate a futures contract on the opening weekend of a film. The exclusion is as specific as the onion one, drafted into the omnibus derivative-reform statute of the century, and almost nobody outside the commodity-law bar knows it exists.
Two carve-outs. Signed into law 52 years apart. That is the entire list.
March 2023: The CFTC Sues Binance and Tests the Outer Edge of Commodity Authority
In March 2023 the CFTC filed a civil enforcement action in the Northern District of Illinois against Binance Holdings Limited and its then-CEO. The complaint ran on the theory that Binance had operated as an unregistered derivatives exchange for US customers in Bitcoin, Ether, and Litecoin — all three of which the agency has treated as commodities under the CEA for years — and had actively facilitated the evasion of its own compliance controls. The headline numbers from the grounding tell you why Binance was the forcing function and not, say, a smaller venue. Daily volume on Binance currently runs at roughly $18.5 billion, across 1,850 listed pairs, with max futures leverage at 125x. The venue is the largest crypto derivatives venue in the world by every measure that gets published, and 125x leverage on a commodity-reference contract is not a product you can quietly offer to US retail without engaging the agency sooner or later.
The theory of the case mattered more than the settlement. For the first time, the CFTC asserted on the record that the entire architecture of a cryptocurrency perpetual swap — not just a specific product listing but the economic structure itself — was a swap under Title VII and therefore a product the agency had jurisdiction to regulate end to end. The complaint did not treat Bitcoin as a special category. It treated Bitcoin as the paradigm case of a Dodd-Frank commodity. Every argument the general counsel's office had quietly rehearsed since 2010 about negative-inference reach was now in a federal docket.
And the enforcement filing landed six months after FTX collapsed, which matters because the political environment in Washington had turned sharply against the industry. The agency was no longer trying to assert jurisdiction into a vacuum. It was asserting jurisdiction into a vacuum that other federal regulators were already trying to fill. The SEC's parallel actions on tokens the SEC called securities were a competing jurisdictional claim. The Binance complaint was partly a venue dispute between the CFTC and the SEC conducted through the choice of defendant and the choice of asset.
What the Binance case tested is exactly the Pham framing. If the agency can prosecute an offshore venue for offering unregistered swaps on three cryptocurrencies to US persons, the Commodity Exchange Act's "almost everything" reach is not theoretical. It is operational.
January 2025: Caroline Pham Takes Over as Acting Chair and Reframes the Doctrine
Caroline Pham was already a sitting commissioner when the chair rotation came in January 2025. The acting-chair appointment did not change her underlying legal views — she had been publishing dissents and concurring statements for two years that previewed the posture. What changed was the microphone. In the first weeks of her tenure she began to frame the agency's authority not through the usual regulatory-lawyer vocabulary of "jurisdictional nexus" and "activity-based oversight" but through the odd rhetorical device at the center of this piece: the agency can regulate almost everything except onions and box office receipts.
Read that sentence carefully. It is a concession framed as a joke. The concession is that the two carve-outs are real and the agency is honest about them. The joke is that everything else — every other commodity, every reference asset, every structured product that can be written on top of them — sits inside the agency's remit by default. The rhetorical move does something a straight assertion of authority cannot. It makes the maximalist reading of the Commodity Exchange Act sound reasonable by sheer contrast. Of course digital assets are commodities. The alternative would require Congress to pass a third carve-out, drafted as specifically as the first two, and that is not something the current Congress is going to do.
I think the framing is useful for a reason that is probably not what Pham intended. It makes the shape of the dispute legible to people who do not read enforcement complaints. The question is not whether crypto is "like" a security or "like" a commodity in some aesthetic sense. The question is whether Congress will carve a third exclusion. If it does not, the default rule applies.
And here is where the Builder's Operating Manual framing matters. If you are custodying Bitcoin at Coinbase Custody, or Fidelity Digital Assets, or Anchorage Digital — the three qualified custodian names in the grounding for this site — the regulatory regime that supervises those entities is not primarily the CFTC. It is NY DFS, OCC, FinCEN, with state money-transmitter overlays. The Pham doctrine does not touch custody. It touches derivatives written on the custodied asset. That distinction is the one most self-custody readers get wrong when they read Caroline Pham in the press.
What It All Means
The onions-and-box-office framing is a load-bearing joke. The agency has had operational authority over almost every tradeable asset in the United States since July 2010, and the two statutory exclusions are the exceptions that prove the rule by occupying all the available carve-out real estate. Pham did not invent that doctrine. She inherited it, named it clearly, and made the political cost of denying it higher than the political cost of accepting it.
What this means for anyone running crypto self-custody — hardware wallets from Ledger, Trezor, GridPlus Lattice1, multisig architectures that split keys across jurisdictions — is less than the headlines suggest. The CFTC does not regulate your cold storage. It regulates the markets where you can hedge, lever, or short the asset sitting in that cold storage. That is a meaningful line and it is not well-drawn in the mainstream coverage. If you want to understand what Pham's framing changes, read the enforcement docket, not the press releases. The docket is where "almost everything" becomes a specific swap product on a specific venue with a specific maximum leverage number.
I would revise this reading if Congress passed a third statutory carve-out — a digital-asset-specific exclusion from the CEA, written as narrowly as the onion one, that pulled perpetual swaps or spot-reference contracts out of the agency's remit entirely. There are serious people in both parties who have floated versions of such a bill since 2023. None of them has moved through committee. Until one does, the Pham doctrine is the operating rule, and the two carve-outs are the only exceptions you need to remember.
FAQ
Why did Congress ban onion futures specifically in 1958?
The 1955 corner by Sam Siegel and Vincent Kosuga on the Chicago Mercantile Exchange collapsed the yellow onion futures price so completely that a 50-pound bag of onions in Chicago cold storage was worth less than the sack holding it. Michigan growers testified that the entire supply chain had been reduced to a speculative game on a crop that could not be stored indefinitely. Congress responded by writing a one-commodity exclusion into the Commodity Exchange Act. It is the only food commodity in the United States that cannot be the subject of a futures contract.
What is the box office receipts exclusion and why does it exist?
Section 721 of Dodd-Frank bans any futures or options contract based on domestic motion picture box office receipts. The exclusion was pushed through by the Motion Picture Association and the major studios in 2009–2010 after the Cantor Exchange and Media Derivatives both filed to list opening-weekend box office contracts. The studios' concern was that a liquid forward curve on opening weekend would replace their private tracking data as the public price signal for every film in production, which would reshape marketing and exhibition decisions in ways the industry did not want.
Does the CFTC regulate Bitcoin and Ether directly?
The agency has treated Bitcoin, Ether, and Litecoin as commodities under the Commodity Exchange Act for years. Its direct regulatory authority runs through derivatives — futures, options, and swaps written on those assets. In the March 2023 enforcement action against Binance, the agency asserted that the economic structure of a cryptocurrency perpetual swap is itself a swap under Title VII of Dodd-Frank, which brought the entire product class into the agency's remit. Spot custody of the underlying asset sits with other federal and state regulators.
Does Caroline Pham's framing change the regulatory status of self-custody?
No, and that is the point most self-custody readers miss. The CFTC regulates derivatives markets and the venues that offer them. Custody of Bitcoin at Coinbase Custody, Fidelity Digital Assets, or Anchorage Digital is supervised by NY DFS trust charters and the OCC federal trust framework, with FinCEN overlays. Hardware wallet self-custody with Ledger, Trezor, or GridPlus Lattice1 is not a CFTC-supervised activity at all. Pham's framing is about derivative perimeter, not storage.
How large is the Binance venue that the CFTC sued in 2023?
Binance currently runs roughly $18.5 billion in daily volume across 1,850 listed trading pairs, with maximum futures leverage of 125x and roughly 350 supported coins. It is the largest crypto derivatives venue in the world by every published volume measure. The size is why the agency used it as the forcing function in its March 2023 enforcement action — a venue that materially larger than any US-registered derivatives exchange and that offered 125x leverage to retail could not be ignored indefinitely.
Could Congress add a third carve-out for digital assets?
In principle, yes. The precedent exists in the onion and box office exclusions, both of which were narrow, product-specific bans drafted into existing commodity statutes. Serious proposals to carve digital assets out of the Commodity Exchange Act have circulated in both parties since 2023, but none has moved through committee as of this writing. Until a specific carve-out is enacted, the default statutory position is the one Pham describes: the agency's authority covers almost everything except the two already-named exceptions.
What is the difference between the CFTC's authority and the SEC's authority over crypto?
The two agencies have overlapping and sometimes competing claims. The CFTC's authority runs through the Commodity Exchange Act and covers derivatives on assets it classifies as commodities, which has historically included Bitcoin, Ether, and Litecoin. The SEC's authority runs through the Securities Exchange Act and covers tokens it classifies as securities. The Binance enforcement action in March 2023 was partly a jurisdictional statement by the CFTC — asserting that cryptocurrency perpetual swaps are swaps under Title VII, which places them inside its remit by default.
Does the "almost everything" doctrine apply to international venues?
The doctrine applies to any venue offering derivatives on US-classified commodities to US persons, regardless of where the venue is incorporated. The 2023 Binance complaint ran precisely on this theory — Binance Holdings is offshore, but the agency alleged it had actively solicited and served US customers in Bitcoin, Ether, and Litecoin perpetual swaps. Headquarters jurisdiction does not insulate a venue from the reach of the Commodity Exchange Act when the customer base includes US persons and the compliance perimeter is being evaded rather than enforced.