The U.S. Commodity Futures Trading Commission announced two related regulatory proposals on Monday to establish oversight of cryptocurrency trading involving leverage, margin, or financing. The rules are intended to fill regulatory gaps left by Congress's failure to pass a comprehensive crypto market structure law.
The CFTC's proposals introduce two regulatory pathways: Regulation Crypto Asset Transactions (Regulation CTX), which directly addresses transactions, and Regulation Crypto Asset Markets (Regulation CAM), which governs platforms hosting such activity. These rules would create a new category of platforms called crypto asset markets (CAMs), a narrower form of the existing designated contract markets (DCMs) that the CFTC already regulates.
"These rules would codify a pathway for crypto asset exchanges to operate under uniform national oversight by the CFTC," CFTC Chairman Mike Selig said in prepared remarks delivered at Fordham Law's Blockchain Regulatory Symposium.
The proposals specifically target leveraged trading, where traders use borrowed funds to amplify their positions. Platforms already registered as DCMs, including Coinbase, Crypto.com, Bitnomial, Kalshi, and Polymarket, would continue operating under their current status, though firms pursuing futures, swaps, and options trading would retain the requirement for full DCM registration.
A significant regulatory gap remains, however: the CFTC lacks authority over spot markets—direct trading of cryptocurrency at current market prices without leverage or margin. This gap encompasses much of the trading in major tokens such as bitcoin and ethereum. The CFTC can still police fraud and manipulation in spot markets, but oversight of direct trading remains under individual state money-transmission regulations.
CFTC officials indicated they are uncertain about the size of the remaining spot market until they review feedback during the 60-day public comment period for these proposals. Officials suggested that industry participants may prefer to operate in federally regulated platforms offering more complex products.
The new CAM category will be held to standards including prohibitions against listing products vulnerable to manipulation and proof-of-reserves requirements for exchanges holding customer assets in omnibus accounts. Trading under Regulation CTX will require futures commission merchants to act as intermediaries, ensuring compliance with Bank Secrecy Act money-laundering safeguards.
The CFTC's proposals also include an "actual delivery" exemption allowing transactions involving real asset exchange within 28 days to be exempt from certain requirements. Additionally, Chairman Selig indicated the agency is developing policies to protect software developers who create products without soliciting orders or holding customer funds.
The CFTC's action follows the Securities and Exchange Commission's earlier regulatory efforts on cryptocurrency, including custody rules for investment firms and an exemption enabling securities tokenization. Both agencies are currently led by only Republican commissioners, as President Donald Trump has not yet nominated members to fill vacancies on their five-member commissions.
