CFTC Pushes Ahead with Crypto Regulations Despite CLARITY Act Stalling

The US Commodity Futures Trading Commission (CFTC) is moving forward with plans to establish a federal regulatory framework for crypto markets, despite Congress failing to pass the CLARITY Act. CFTC Chair Michael Selig announced two key initiatives: Regulation Crypto Asset Transactions (CTX) and Regulation Crypto Asset Markets (CAM). These frameworks will rely on existing authority under the Commodity Exchange Act, though Selig acknowledged that Congress alone can mandate all crypto exchanges to register with the CFTC.

The initial focus will be on platforms offering retail crypto trading with leverage, margin, or financing. Existing CFTC-registered exchanges can add these products, while specialized firms could register under the new CAM category. Ordinary spot crypto exchanges will not automatically fall under federal oversight but will have another regulatory option alongside state licensing.

Among other considerations, the CFTC is exploring proof-of-reserves requirements for platforms that pool customer assets, along with rules on market manipulation, customer funds, and financial safeguards. The agency also aims to clarify when crypto transfers to customer-controlled wallets qualify as 'actual delivery,' proposing that transfers completed within 28 days would generally count. Additionally, the CFTC is examining how existing rules apply to developers of decentralized software who do not handle customer assets or control transactions.

Selig emphasized that the administration intends to develop crypto market rules 'with or without legislation.' This move follows the SEC's own crypto rulemaking push, which began in August with a proposal for tailored exemptions and a conditional safe harbor for certain crypto-related investment-contract offerings.