CFTC Unveils Two Crypto Rule Proposals to Regulate Leveraged and Margin Trading

The Commodity Futures Trading Commission has put forward two linked rules to oversee crypto trading that involves leverage, margin or financing. The agency calls the plan a comprehensive framework, and it comes as Congress has failed to finish a crypto law. One rule, Regulation CTX, covers the transactions themselves. The other, Regulation CAM, sets up a new type of platform called a crypto asset market. Chairman Mike Selig said the rules would give exchanges a path to operate under one national regulator. Comments are open for 60 days.

Crypto Spot Market Gap and State Rules

The CFTC still lacks authority over plain spot trading, such as buying bitcoin or ether outright. It can only police fraud and manipulation there, and state money-transmission laws continue to govern those trades. Officials say they cannot yet judge how large the remaining spot market will be.

Requirements for Crypto Asset Markets

Platforms in this category must avoid listing products open to manipulation and show proof of reserves if they hold customer assets in omnibus accounts. Leveraged activity must run through futures commission merchants, which brings in anti-money-laundering safeguards. Deals involving actual delivery within 28 days would be exempt.

SEC Rulemaking and Regulatory Gaps

The proposals follow the stalled Clarity Act in the Senate last month, while the SEC has moved faster with custody rules and a tokenization exemption. Both agencies have only Republican commissioners. Selig, the sole CFTC commissioner for nearly a year, also said developers should not have to register as brokers simply for shipping code.