U.S. Regulators Push Forward with Federal Crypto Regulations

The U.S. is advancing federal crypto regulations to maintain a competitive edge in the global digital asset market. On October 5, the Commodity Futures Trading Commission (CFTC) launched a consultation for a national framework governing retail crypto commodity transactions. This initiative aligns with President Donald Trump’s directive for federal oversight and aims to provide tailored protections for retail traders.

CFTC Chairman Michael S. Selig emphasized that the proposed framework would offer a federal registration option for crypto exchanges dealing with leveraged, margined, or financed trades. He clarified that full federal registration for all exchanges would require congressional action. The consultation follows earlier preparatory work under existing authority.

Meanwhile, the Securities and Exchange Commission (SEC) is also pushing forward with crypto-related measures. SEC Chairman Paul S. Atkins indicated in an October 1 statement that more regulatory proposals are forthcoming. The SEC’s proposed changes include a tailored custody framework that would allow self-custody in certain cases and permit state trust companies as custodians. Additionally, the Innovation Exemption, effective since September 17, provides temporary relief for qualifying trading venues handling tokenized stocks.

Customer protections under the CFTC’s proposal include proof of reserves and requirements for registered intermediaries to handle customer funds separately from firm assets. Selig also proposed clarifying rules to allow transfers to external noncustodial wallets within 28 days, satisfying an exception to registered-exchange trading requirements. The agencies are gathering feedback before potential regulations are finalized, with written comments due within 60 days of publication in the Federal Register.