CFTC seeks public input to shape crypto regulatory framework

The US Commodity Futures Trading Commission (CFTC) has launched an effort to create a comprehensive regulatory framework for crypto asset transactions, inviting public comments on proposed rules. On Monday, the CFTC published an Advanced Notice of Proposed Rulemaking (ANPRM) seeking input on establishing regulations for retail commodity transactions involving crypto assets under Section 2(c)(2)(D) of the Commodity Exchange Act.

CFTC Chairman Michael S. Selig emphasized that the initiative aims 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 is designed to prevent abusive practices and establish a uniform national regulatory regime. The CFTC is also seeking views on providing market participants with crypto-specific information on regulatory requirements and industry best practices. Additionally, the agency is considering creating a new category of designated contract market registration called a 'crypto asset market' for retail commodity transactions involving crypto assets.

Selig highlighted that the agency's approach will focus 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.