CFTC Seeks Public Input to Build Crypto Regulatory Framework

The US Commodity Futures Trading Commission (CFTC) has taken the first step toward creating a comprehensive regulatory framework for crypto asset transactions. On Monday, the CFTC published an Advanced Notice of Proposed Rulemaking (ANPRM) seeking public comments on rules for retail commodity transactions involving crypto assets. The initiative aims to establish a uniform national regulatory regime for these transactions under Section 2(c)(2)(D) of the Commodity Exchange Act.

CFTC Chairman Michael S. Selig emphasized that the goal is to provide clarity, certainty, and consumer protections in the crypto asset markets. He stated, "The American people deserve clarity, certainty, and consumer protections in the crypto asset markets and the agency is committed to delivering this by incorporating crypto asset transactions into its uniform national market regulatory framework."

The proposed framework seeks to prevent abusive practices in crypto asset markets. The CFTC is also looking for input on providing market participants with crypto-specific information on regulatory requirements and industry best practices. Another key consideration is the creation of a "crypto asset market" category for designated contract market registration, specifically designed for retail commodity transactions involving crypto assets.

Selig highlighted that the agency's approach focuses on preventing misconduct rather than relying solely on enforcement after violations occur. He mentioned the need to establish regulations that prevent fraudulent schemes like FTX. The CFTC will use the information and comments received to inform potential future agency action, including possible rulemaking concerning Section 2(c)(2)(D) and crypto asset transactions.

Market participants and other stakeholders have 60 days from the publication of the notice in the Federal Register to submit written comments.