CFTC Readies Regulatory Framework for Crypto Markets Amid Congressional Gridlock

The US Commodity Futures Trading Commission (CFTC) has announced plans to regulate leveraged trading in crypto markets if Congress stalls on passing the CLARITY Act. Chairman Mike Selig stated that if the bill fails to move forward, the CFTC will use its existing authorities to establish a regulatory framework for crypto asset markets.

Selig made this announcement at the first Innovation Advisory Committee meeting held on August 21. The plan is based on a special status for crypto exchanges, which could allow them to offer leveraged or collateralized transactions under CFTC oversight. This status is modeled after a specific US derivative exchange status called 'crypto asset DCM.'

The proposed framework would cover both registered and unregistered crypto exchanges, potentially affecting global platforms that may need to adapt their products to comply with US rules. While this plan is not yet in effect, the CFTC has instructed its staff to work on a new status for exchanges.