The Commodity Futures Trading Commission (CFTC) has published an advance notice outlining Regulation CTX and Regulation CAM, which would allow crypto exchanges to register as a new type of federally regulated "crypto asset market." The agency is moving forward with rulemaking proposals following the collapse of the Clarity Act last month.
Under the agency's preliminary reading of a 2010 Dodd-Frank provision, merely offering leverage, margin, or financing could bring even fully paid trades under CFTC oversight unless customers take actual delivery of their crypto. The CFTC suggests actual delivery could require customers to hold their private keys, meaning on-chain trading protocols that send tokens straight to user wallets would typically clear that bar.
The public has 60 days to comment once the notice appears in the Federal Register. Exchanges that do not offer leverage will be permitted to continue operating under state money transmitter licenses.
The proposal outlines two linked frameworks: Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). Regulation CAM would create a "crypto asset market" license, a tailored version of the designated contract market status held by futures exchanges. Under this framework, trades would run through futures commission merchants and brokers subject to anti-money laundering rules, with leverage provided only by those brokers or banks they sponsor. Exchanges could also choose to register as their own broker and clearinghouse.
Additionally, the CFTC is considering proof-of-reserves requirements and standards to prevent the listing of tokens prone to manipulation. CFTC Chairman Michael Selig stated that the rules are designed to prevent fraudulent schemes rather than only prosecuting them after the fact.
The notice also rejects the agency's past approach, describing previous cases against Kraken, Ooki DAO, and Uniswap as regulation by enforcement. The framework was sent to the White House for review in September after the Clarity Act failed in the Senate.
