CFTC proposes federal oversight for leveraged crypto exchanges

The U.S. Commodity Futures Trading Commission (CFTC) has unveiled new rules aimed at establishing a federal regulatory framework for cryptocurrency exchanges offering leveraged digital asset trading. Announced on Monday, the proposal would enable U.S. crypto exchanges to opt for federal oversight rather than relying on varying state money-transmitter licenses.

The move follows Congress's failure to advance comprehensive crypto regulation in recent weeks. By adopting the new framework, exchanges would operate under a single set of federal rules instead of navigating different state requirements, which industry participants argue creates unnecessary burdens.

The proposed rules leverage the CFTC’s existing authority to oversee margined or leveraged spot assets, a market currently lacking clear regulatory guidelines. While the CFTC has sought regulatory authority over these markets, only Congress can grant such power. The new rules would introduce a fresh category of CFTC-regulated trading venues called a "crypto asset market" for exchanges offering leveraged or margined trading to retail customers.