CFTC Proposes Federal Rules for Crypto Exchanges After Congress Fails to Act

The Commodity Futures Trading Commission (CFTC) is taking steps to create a federal regulatory framework for cryptocurrency exchanges after Congress failed to pass the Clarity Act, which aimed to establish market structure rules for the digital asset industry.

On October 5, 2026, the CFTC published an advance notice of proposed rulemaking outlining two regulatory frameworks: Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). The public has 60 days to comment after the notice is published in the Federal Register.

Regulation CTX would rely on an existing provision of the Dodd-Frank Act, requiring retail commodity transactions involving leverage to occur on a CFTC-registered exchange. The CFTC is considering an expansive interpretation, potentially subjecting even fully paid crypto transactions to oversight if assets remain on the exchange’s internal books rather than being transferred to a customer’s wallet.

Regulation CAM would create a new “crypto asset market” registration category, modeled on the framework governing futures exchanges. Transactions on registered markets would flow through futures commission merchants subject to anti-money laundering requirements, with leverage supplied by intermediaries or sponsoring banks.

CFTC Chairman Michael Selig stated that the proposed framework aims to prevent fraudulent schemes like FTX. The initiative marks a shift from the agency’s previous enforcement-focused approach, highlighting cases involving Kraken, Ooki DAO, and Uniswap as examples of “regulation by enforcement.”

The Securities and Exchange Commission is also proceeding with parallel regulatory efforts, including its own Regulation Crypto Assets and an innovation exemption for tokenized stocks, indicating that federal regulators are advancing administrative measures despite the lack of comprehensive legislation.