CFTC Proposes New Rules for Leveraged Crypto Trading

The Commodity Futures Trading Commission (CFTC) has proposed a new regulatory framework aimed at bringing clarity to leveraged, margined, or financed crypto trading for retail customers. The proposal introduces a new registration category called “crypto asset market” (CAM) and requires exchanges to maintain proof of reserves and use futures commission merchants for certain leveraged trades.

CFTC Chair Michael Selig emphasized the importance of this step, stating that the agency is committed to delivering clarity and certainty to the American people. The new rules would also consider assets sent to a customer’s non-custodial wallet within 28 days as “actual delivery.” However, the proposal does not cover the spot crypto market, which remains outside the CFTC’s full reach.

The CFTC is seeking public feedback on the proposal, with a 60-day window for market participants to submit their views. The feedback will help inform potential rulemaking on crypto asset transactions and the CAM framework. Selig also highlighted the agency’s efforts to prevent fraudulent schemes like FTX, underscoring the proactive approach to regulation.

While the new rules will not replace existing state-level regulations overseeing direct crypto trading, they aim to provide a uniform national market regulatory framework for more complex crypto products.