The US Commodity Futures Trading Commission (CFTC) has proposed a new regulatory framework for retail cryptoasset transactions (CTXs) under Section 2(c)(2)(D) of the Commodity Exchange Act (CEA). The advance notice of proposed rulemaking (ANPRM) outlines two potential regulations: Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). The proposal does not include specific regulatory text but seeks public comment on a detailed framework.
One key aspect of the proposal is the jurisdictional theory, which allows the CFTC to regulate certain retail crypto transactions that are leveraged, margined, or financed. The CFTC interprets the word “offer” broadly, meaning that even if a customer declines financing and trades on a fully paid basis, the transaction could still fall under CFTC regulation if the platform offers leverage. The proposal also suggests that actual delivery of the cryptoasset must occur within 28 days for the transaction to fall outside CFTC jurisdiction.
The CFTC emphasizes that this framework is designed to prevent evasion of futures regulation without interfering with legitimate spot markets. The actual-delivery exception is crucial, as it excludes contracts where the commodity is delivered within a specified period. The ANPRM aims to adapt this framework to modern crypto markets, providing a clearer path for regulated exchanges.
The proposal also addresses third-party financing arrangements, stating that financing facilitated or endorsed by the exchange could bring transactions under CFTC jurisdiction. The practical consequence is that centralized crypto exchanges making platform-wide offers to retail customers could see both leveraged and fully paid purchases fall under Section 2(c)(2)(D), unless the actual delivery exception applies.