CFTC maps out first US rulebook for crypto trading venues

The top US derivatives regulator wants a rulebook for crypto exchanges that let people trade with borrowed money. On October 5 the Commodity Futures Trading Commission asked the public how to build one, and set a 60-day clock for responses.

That request came as an advance notice of proposed rulemaking, a formal way of asking questions before any rule text exists. The CFTC published it as Release 9307-26 and said it will post every comment on Regulations.gov. Chairman Michael S. Selig said the aim is to stop fraud like the FTX collapse, in his words to prevent it "rather than only prosecute after the fact." Selig is the agency's only sitting commissioner, and has been for nearly a year.

What the CFTC is actually proposing

The plan has two parts. One is Regulation Crypto Asset Transactions, which the agency calls Regulation CTX. It would cover retail crypto trades that use leverage, margin, or financing, the kind of borrowing that can multiply gains and losses alike. The other is Regulation Crypto Asset Markets, or Regulation CAM, a new registration category for the venues that host those trades.

Both sit under one dusty line of law: section 2(c)(2)(D) of the Commodity Exchange Act. That clause already governs leveraged retail commodity deals, and the CFTC argues it reaches leveraged crypto too. The agency points to its oversight of crypto markets since 2014 as the basis for what it calls best practices. The two drafts cleared White House budget-office review on October 2, after landing there on September 17.

Neither framework is a finished rule. An advance notice only asks how the rules should work. CoinDesk, which detailed the proposals on October 5, reported that the drafts would require futures commission merchants, the licensed middlemen of the futures world, to sit between retail traders and the exchange. That would pull leveraged crypto trading under the same anti-money-laundering checks banks and brokers follow. It lands during a fast reset of Washington's rules, from FinCEN withdrawing older wallet and mixer rules to the CFTC's move here.

What would change for traders and exchanges

For an exchange, the bar would rise. Regulation CAM would carve a crypto-specific lane inside the CFTC's existing designated contract market system, the framework that already governs futures exchanges. Venues that opt in would face rules against listing products that are easy to manipulate. Proof of reserves is the central requirement, a response to collapses where customer coins turned out not to be there. They would have to show the pooled accounts they hold are fully backed.

Traders would notice the plumbing more than the screen. CoinDesk reported the proposal includes an "actual delivery" exemption, where a trade that hands over the real asset, say a coin moved to a wallet the buyer controls, within 28 days would fall outside the on-exchange requirement. Spot purchases, where someone buys a coin and simply holds it, would not be swept in at all.

Selig has tried to calm fears that the net would catch software developers. "A person should not have to register as an introducing broker simply because that person shipped code," he said. The agency says it is weighing protections for builders. The notice even asks whether the futures world's customer-protection playbook, including how client money is walled off in a bankruptcy, fits crypto at all.

The gap the rules do not close

Here is the catch. The CFTC oversees derivatives, not the spot market where most people actually buy bitcoin and ether. It can chase fraud and manipulation there, but it cannot set the licensing rules, so state money-transmission laws still cover direct buying and selling. The agency has pushed on other fronts too, including a separate move to classify prediction-market contracts as swaps.

That gap was the whole point of the Digital Asset Market Clarity Act, the market-structure bill that would have handed the CFTC clearer authority over spot crypto. It stalled in the Senate in September on a 49 to 50 cloture vote, 11 short of the 60 it needed. Without it, the agency is building on the powers it already holds.

Officials have admitted they do not know how big the leftover spot market will be, or how many traders will pick federally supervised venues over state-licensed ones. Much depends on Congress. As usual. For a retail trader, the practical read is narrow. Nothing changes today, and spot buying on a state-licensed app stays exactly as it is. For now, nobody can say when, or whether, a broader law arrives.

How this fits with the SEC

This is a two-agency effort. The Securities and Exchange Commission has been drafting its own crypto rules in parallel, including a proposed Regulation Crypto Assets with carve-outs for smaller token sales. One would let a startup raise up to $5 million over four years, another up to $75 million in any 12-month period, Baker Botts noted. Comments on the SEC's plan close on October 20, according to the law firm, which tracked both efforts.

Two agencies, two comment windows, one unfinished map. The split reflects an old divide in US law. The SEC polices securities, the CFTC polices commodities, and crypto refuses to sit neatly in either box. A joint CFTC and SEC taxonomy earlier in 2026 tried to sort which tokens go where, and bitcoin and ether landed on the CFTC's side as commodities.

None of this is settled. Both sets of proposals can change before they bind anyone, and the comment files will shape what survives.

What to watch

A few markers will show whether this plan has teeth. First, the close of the comment window, when the volume and tone of industry responses come into view. Second, whether the CFTC turns its advance notice into actual proposed rules, a step that can take many months. Third, any movement on a market-structure bill in Congress, which would change the whole foundation.

Watch the exchanges, too. If large platforms signal they will register as crypto asset markets, the framework gains weight fast. If they wait Congress out, it may sit on the shelf. One ANPR does not rewire a market. It starts the clock.