CFTC Proposes Federal Rules for Crypto Exchanges After Clarity Act Fails

The U.S. Commodity Futures Trading Commission (CFTC) has taken a bold step to regulate crypto exchanges offering leverage, following the collapse of the Clarity Act in the Senate. On 5 October 2026, the CFTC published an advance notice of proposed rulemaking outlining two frameworks, Regulation CTX and Regulation CAM, aimed at bringing such exchanges under federal oversight.

This move signals a shift from legislative action to regulatory oversight. The Clarity Act, which would have established ground rules for most U.S. crypto activity, failed in the Senate in September. CFTC Chairman Michael Selig had previously indicated that the agency would develop its own crypto rules if Congress did not act.

The proposed frameworks reject the CFTC’s past approach of 'regulation by enforcement,' as seen in cases against Kraken, Ooki DAO, and Uniswap. Instead, the new rules are designed to prevent fraudulent schemes like FTX before they occur. Regulation CTX defines which crypto trades require federal oversight, while Regulation CAM would create a 'crypto asset market' license for exchanges.

The CFTC is also considering additional measures, such as proof-of-reserves requirements and standards to prevent token manipulation. Exchanges not offering leverage could continue operating under state money transmitter licenses. The public will have 60 days to comment on the proposal once it appears in the Federal Register.