CFTC proposes federal framework for leveraged crypto trading

The Commodity Futures Trading Commission (CFTC) has initiated a rulemaking process to create a federal regulatory framework for leveraged and margined retail crypto trading. The proposal includes a new registration category for exchanges offering these products, under regulations called Regulation CTX and Regulation CAM.

CFTC Chairman Michael Selig emphasized the importance of this step, stating that it is crucial for ensuring America remains a leader in the crypto space. The framework aims to provide clarity, certainty, and consumer protections for crypto asset markets by integrating them into a uniform national market regulatory framework.

The proposed regulations would establish requirements for CFTC-registered exchanges offering crypto assets for trading. However, unlike the Clarity Act, these rules would not mandate that crypto assets trade exclusively on CFTC-registered platforms, as the CFTC lacks the authority to impose such a requirement without congressional action.

Selig highlighted that the CFTC and the Securities and Exchange Commission are working to establish crypto regulations following the failure of the Clarity Act to pass the Senate last month. He also reiterated the Commission's commitment to preventing fraudulent schemes, such as FTX, through proactive regulation.