The US Commodity Futures Trading Commission has proposed a new federal framework for crypto exchanges that offer leveraged trading to retail customers. CFTC Chairman Michael S. Selig announced the proposals on October 5 during remarks at the Fordham Law Blockchain Regulatory Symposium in New York.
The framework targets two regulatory proposals: Regulation Crypto Asset Transactions (CTX) and Regulation Crypto Asset Markets (CAM). The initiative provides a voluntary federal path for crypto platforms, though they could continue operating under state licenses if their business model allows.
Three-Tier Market Structure
The CFTC described the crypto market through a three-level structure. Spot exchanges would remain largely under state money transmission rules. Exchanges offering retail margin, leveraged, or financed crypto trading would fall into a second category subject to new federal requirements. Platforms offering derivatives such as perpetual contracts would comprise a third category.
Customer Protections and Requirements
Exchanges offering leveraged crypto transactions could register as a new type of derivatives exchange called a crypto asset market. The framework would establish requirements covering:
- Market surveillance
- Financial safeguards for customer funds
- Proof-of-reserves rules for omnibus accounts
- Anti-money laundering and customer identification procedures
Futures commission merchants would handle customer accounts and funds under existing customer protection requirements. Under the proposal, crypto assets transferred to a customer's external wallet within 28 days could generally meet the CFTC's interpretation of "actual delivery."
Scope and Next Steps
The framework does not establish a complete federal crypto regulatory regime. Existing CFTC-registered derivatives exchanges could also offer these products under the proposed rules. The CFTC is considering how the rules could work with self-custody arrangements.
Congress would still need to decide whether all exchanges should be required to register federally. The agency is seeking public input on the proposals.
