The CFTC wants leveraged crypto exchanges to operate under clearer federal rules covering customer funds, surveillance, and market integrity.
The new federal framework was proposed by the US Commodity Futures Trading Commission for crypto exchanges that offer leveraged trading to retail customers. The move could give US crypto platforms a clearer route to federal oversight at a time when the country still lacks a broad crypto market law.
CFTC Chairman Michael S. Selig announced the proposals on October 5 during remarks at the Fordham Law Blockchain Regulatory Symposium in New York. The agency is seeking public input on proposals covering Regulation Crypto Asset Transactions (CTX) and Regulation Crypto Asset Markets (CAM).
New Federal Path for Leveraged Trading
The framework would be a federal option for crypto exchanges. Platforms would not automatically be forced into the CFTC system. They could continue operating under state licenses if their business model allows it. Exchanges offering certain types of leveraged crypto trading, however, already fall under CFTC registration requirements under existing law.
The CFTC described the crypto market through a three-level structure. Ordinary spot exchanges would remain largely under state money transmission rules, while the CFTC would continue to have anti-fraud and anti-manipulation powers. Exchanges offering retail margin, leveraged, or financed crypto trading would fall into the second category. Platforms offering derivatives such as perpetual contracts would sit in the third category. The new proposals mainly target that second group.
Under the plan, exchanges that only want to offer leveraged crypto transactions could register as a new type of derivatives exchange called a crypto asset market (CAM). Existing CFTC-registered derivatives exchanges could also offer these products under the proposed rules.
The framework would bring several customer protections into the picture. CAMs could face requirements covering market surveillance, financial safeguards, as well as customer funds. The CFTC is also considering proof-of-reserves rules for exchanges holding customer assets in omnibus accounts.
Another major piece involves futures commission merchants (FCMs). These firms would handle customer accounts and funds and would have to follow existing customer protection requirements. Their involvement would also bring anti-money laundering and customer identification rules into the process. The CFTC is looking at how the rules could work with self-custody as well. Under the proposal, crypto assets sent to a customer’s external wallet within 28 days could generally meet the agency’s interpretation of “actual delivery.”
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“The framework I have outlined is an important step towards bringing crypto asset markets within the protections of the CEA. It will establish clear rules of the road for firms that want to serve American customers, strengthen the integrity of these markets, and provide a path for responsible innovation to take place here in America.”
On Onchain Finance
Selig also pointed to the agency’s wider interest in onchain finance. He said developers who simply publish software and do not control trades or hold customer assets should not automatically be treated like traditional intermediaries.
The proposal does not create a full federal crypto regime on its own. Congress would still have to decide whether all exchanges should be required to register federally.
