CFTC Unveils New Crypto Rules After CLARITY Act Fails
The Commodity Futures Trading Commission (CFTC) is moving forward with its own crypto market-structure rules after Congress failed to advance the CLARITY Act. Chairman Michael Selig emphasized that existing statutory authority allows regulators to establish clearer rules without waiting for congressional action.
The CFTC is proposing two key regulations: Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). These aim to set requirements for CFTC-registered exchanges trading assets like Bitcoin (BTCUSD) and Ethereum (ETHUSD). The proposals build on an earlier joint CFTC-SEC interpretation, which classified a broad group of crypto assets, including Bitcoin and Ethereum, as non-securities under the CFTC’s authority.
One notable feature of the proposed framework is the treatment of leveraged crypto trading. CFTC-registered platforms could allow retail investors to trade crypto on a margined, leveraged, or financed basis, setting them apart from ordinary spot exchanges. The framework would also impose standards to deter market manipulation, protect customer funds, address conflicts of interest, and promote market transparency.
Chairman Selig criticized the previous regulatory approach, arguing that the CFTC and SEC relied too heavily on enforcement rather than creating tailored rules for crypto markets. He cited the FTX collapse as evidence of the need for preventative federal regulation. Selig noted that the customer property held by FTX’s CFTC-registered subsidiary remained secure even as the broader group entered bankruptcy. He declared, “Those days are over,” referring to efforts to make crypto exchanges register under legacy securities frameworks. Selig added that today’s action is “just the beginning” and more CFTC crypto market-structure rules could follow.