The U.S. Commodity Futures Trading Commission on Monday issued an advance notice of proposed rulemaking that would establish the agency’s first dedicated federal framework for certain cryptocurrency transactions. The proposals, titled Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets, target retail trades offered on a margined, leveraged or financed basis and create an optional registration path for platforms that wish to operate under a single national regime.

The move comes weeks after the Senate failed to advance the Clarity Act, comprehensive market-structure legislation that would have clarified the division of authority between the CFTC and the Securities and Exchange Commission. In the absence of new statutes, CFTC Chairman Mike Selig said the agency is proceeding under its existing powers in the Commodity Exchange Act and a 2010 Dodd-Frank provision covering retail commodity transactions that involve leverage or financing.

Scope Limited to Leveraged and Financed Retail Activity

Regulation CTX focuses on what the agency terms crypto asset transactions: retail purchases of digital assets that involve margin, leverage or other financing. Under the agency’s preliminary interpretation of existing law, simply offering leverage—through account agreements or terms of service—could bring related activity under federal oversight unless customers take actual delivery of the assets, such as by holding private keys in their own wallets. Fully paid spot trades that never involve financing remain outside the new framework and continue to operate primarily under state money-transmitter licenses.

Regulation CAM would create a specialized subcategory of designated contract market registration known as a crypto asset market. Platforms that elect this status could offer the covered leveraged products under uniform federal standards rather than a patchwork of state rules. Customer trades would generally be intermediated by registered futures commission merchants, and the venues would face requirements covering anti-manipulation controls, conflicts of interest, and proof-of-reserves obligations. Exchanges could also register to act as their own brokers or clearinghouses.

The CFTC emphasized that the framework is voluntary. The agency lacks statutory authority to require all crypto trading to occur on CFTC-registered platforms; only Congress can grant that power. Ordinary spot exchanges that do not offer leverage or financing would retain their current state-based licensing arrangements, though the CFTC would continue to police fraud and market manipulation in those markets.

Response to Regulatory Gaps and Past Failures

Selig framed the proposals as a shift away from the prior administration’s reliance on enforcement actions. He cited the collapse of FTX as an illustration of the limits of state-level oversight: while several of the firm’s offshore and state-licensed entities failed, customer assets held at its CFTC-registered affiliate remained segregated and protected. The new rules, he said, are designed to prevent fraudulent schemes rather than prosecute them after the fact.

The advance notice seeks public comment on a range of issues, including how best to codify the new registration category, how to deter abusive practices, and what information should be provided to market participants about compliance expectations. The comment period will run for 60 days after the notice is published in the Federal Register. After reviewing feedback, the agency may issue formal proposed rules, which would themselves undergo further public review before any final adoption.

Parallel Regulatory Tracks and Remaining Limits

The CFTC action follows similar steps by the Securities and Exchange Commission, which earlier proposed its own tailored offering regime for crypto assets and approved certain tokenized-stock trading arrangements. Both agencies have stated that their initiatives implement a presidential directive to develop a federal crypto market structure using existing statutory tools.

Officials acknowledged that agency rulemaking cannot fully replace legislation. The proposals do not provide the broad preemption of state law that the Clarity Act would have delivered, and future commissions could revise or withdraw the rules. Selig noted that a comprehensive statutory framework remains necessary for long-term clarity, yet the CFTC intends to use the tools it currently possesses while Congress considers further action.

The three-tier market structure envisioned by the agency places traditional spot platforms under continued state oversight, subjects leveraged retail venues to the new federal option, and leaves existing futures and perpetual-contract markets under the CFTC’s longstanding designated-contract-market regime. Public input gathered over the coming months will shape the precise contours of the first dedicated federal rulebook for leveraged retail crypto trading in the United States.