CFTC Proposes First Crypto Rules as Congress Stalls
The Commodity Futures Trading Commission (CFTC) has unveiled its first proposed rules for the crypto industry, stepping into the regulatory void left by Congress after the CLARITY Act failed to pass in September. CFTC Chairman Michael Selig announced the move in a press release and a video on his X account, stating that the agency has the statutory authority to build a federal crypto market structure and intends to use it. The new rules aim to prevent fraudulent schemes like FTX rather than just prosecute them after the fact.
The proposals include two key rules: Regulation Crypto Asset Transactions (CTX) and Regulation Crypto Asset Markets (CAM). CTX defines which crypto trades the CFTC should oversee, primarily focusing on leveraged trades where retail customers borrow money or use margin. CAM would create a new CFTC license specifically for exchanges offering these trades, replacing the current patchwork of state licenses that the CFTC argues are inadequate for preventing price manipulation and conflicts of interest.
The notice opens a 60-day public comment period once published in the Federal Register. Even if the CFTC moves forward, it will still need to issue formal proposed rules and final ones, meaning exchanges won’t face binding requirements immediately. Meanwhile, the House is not due back until after the November midterms.
Chairman Selig acknowledged that agency rulemaking has limitations, such as not providing the broad state-law preemption that the CLARITY Act was designed to offer. Additionally, future commissions could withdraw rules that exist only at the agency level.