CFTC Adopts Insider Trading Hunting Tool to Monitor Crypto

The CFTC has teamed up with Nasdaq to deploy a cutting-edge insider trading hunting tool, which gives regulators new firepower to detect fraud and manipulation across crypto and derivatives markets.

Unveiled on August 27 in Washington, the system is seen my many industry experts as the agency’s most significant tech upgrade in years, replacing outdated infrastructure as pressure mounts to police digital assets.

Why the New Tool Matters

The adoption of Nasdaq’s market surveillance technology reflects the CFTC’s ambition to become what Pham called a “21st century regulator.” With the new insider trading hunting tool, the agency will be able to generate automated alerts and cross-market analytics for the first time.

“As our markets continue to adopt and integrate new technology, it is essential that the CFTC is prepared to move forward,” Pham told reporters. “The insider trading hunting tool will provide automated alerts and cross-market analytics, ensuring stronger protection against fraud and abuse.”

The upgrade comes as Congress considers the 21st Century Act, legislation designed to promote financial innovation. If passed, the bill could expand the CFTC’s scope over spot digital asset markets, intensifying the regulator’s role in crypto oversight.

Nasdaq’s Role in Market Integrity

In a statement, Nasdaq confirmed that its surveillance system—customized for the CFTC as an insider trading hunting tool—is already used by more than 50 exchanges and 20 regulators worldwide.

“Today’s financial markets require surveillance technology that can keep pace with rapidly changing conditions and new asset classes,” said Tal Cohen, President of Nasdaq. “Our collaboration with the CFTC demonstrates how the insider trading hunting tool can promote resilient and transparent markets.”

The system is designed to detect wash trading, pump-and-dump schemes, and market manipulation, issues that have long plagued crypto. According to Chainalysis, wash trading on blockchain networks in 2025 reached $2.57 billion, highlighting the scale of the problem regulators are trying to contain.

Growing Pressure on U.S. Regulators

The rollout of the insider trading hunting tool comes as U.S. regulators face mounting pressure to address crypto-related crime. According to Global Ledger, illicit fund transfers on blockchains often occur in under three minutes—faster than most exchanges can react.

In response, the Treasury Department is seeking public input on the use of AI, blockchain monitoring, and digital identity tools to combat money laundering. Treasury Secretary Scott Besant described these measures as “essential to securing America’s digital asset leadership.”

At the same time, the CFTC has launched a “crypto sprint” to accelerate rules for spot crypto trading, with its new insider trading hunting tool positioned as a cornerstone of that effort.

Looking Ahead

U.S. regulators are increasingly turning to cutting-edge technology to close enforcement gaps in digital asset markets. The CFTC’s deployment of the insider trading hunting tool marks a significant step in that direction.

How aggressively the tool will be deployed may depend on future leadership at the agency. But for now, the signal to market participants is clear: regulators will no longer rely on outdated systems.

As crypto markets continue to expand, the insider trading hunting tool could become not only the foundation of U.S. oversight but also a model for regulators worldwide.