CFTC Seeks Public Input on New Crypto Trading Regulations

The U.S. Commodity Futures Trading Commission (CFTC) has proposed a new regulatory framework for leveraged and margined crypto trading. On October 5, the agency published an Advanced Notice of Proposed Rulemaking (ANPRM), seeking public comment on a plan to create a federal registration category called a "crypto asset market". This would cover platforms offering leveraged, margined, or financed crypto trading to retail customers, while basic spot trading would remain under state oversight.

The proposal follows Congress’s failure to pass the Digital Asset Market Clarity Act, which aimed to split crypto oversight between the CFTC and the SEC. The CFTC’s move targets offshore platforms like OKX and Bybit, which offer high-leverage products, such as perpetual futures with up to 100x leverage on tokens like bitcoin and solana. Domestic venues like Coinbase and Kraken already provide regulated perpetual-style products for U.S. customers.

CFTC Chairman Michael S. Selig described the measure as a "federal option for crypto asset exchanges", emphasizing that only Congress can mandate universal registration. The ANPRM addresses abusive practices in crypto markets and seeks to provide clarity and consumer protections. Comments on the proposal must be submitted within 60 days of its publication in the Federal Register.

The CFTC’s action comes alongside the SEC’s recent approval of leveraged Bitcoin and Ether ETPs and ongoing enforcement efforts, including a $31 million judgment in the Fundsz fraud case. The proposal aims to prevent fraudulent schemes, such as FTX, and ensure America remains a leader in the crypto market.