CFTC Proposes New Crypto Market Rules Following Legislative Stalls
The CFTC has introduced two new rulemakings, Regulation CTX and Regulation CAM, to establish a federal framework for crypto exchanges after the Clarity Act failed to advance in the Senate.
The Commodity Futures Trading Commission is moving forward with its first dedicated crypto market rules. Chair Michael Selig announced the proposals, dubbed Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets, following the Senate’s failure to pass the Clarity Act.
These rules aim to create a federal framework for crypto exchanges that choose to register with the CFTC. Unlike the stalled Clarity Act, the new proposals do not mandate that spot crypto platforms register with the agency, as Selig noted the CFTC lacks the authority to impose such a requirement without congressional action.
Exchanges that opt into this framework would be permitted to offer retail customers leveraged, margined, or financed crypto trading. This distinguishes them from standard spot exchanges and aligns them more closely with the agency's existing jurisdiction.
Selig described the initiative as a shift away from the enforcement-heavy approach of the previous administration. He argued that forcing crypto firms to adhere to rules built for traditional financial infrastructure created uncertainty and drove businesses offshore.
The proposal draws on the lessons of the FTX collapse. Selig highlighted that while most of the firm's entities faced bankruptcy, customer assets held through its CFTC-registered subsidiary remained secure. He pointed to this as evidence of the importance of federal rules regarding customer asset protection, conflict of interest, and market manipulation.
The agency intends for these rules to provide a unified federal alternative to the current state-based money-transmitter regimes, which Selig argued were designed for payments rather than financial markets and lack consistency.
While the CFTC cannot fully replace the market structure legislation envisioned by Congress, Selig stated that the agency will continue to address gaps in the sector. He noted that the current action is just the beginning of the agency's efforts to develop clearer standards for market participants.
