CFTC proposes federal registration framework for leveraged retail crypto trades

Investing.com -- The Commodity Futures Trading Commission unveiled an Advanced Notice of Proposed Rulemaking on Monday aimed at establishing a tailored regulatory framework for leveraged digital asset transactions offered to retail investors. The initiative draws on the agency's existing authority under section 2(c)(2)(D) of the Commodity Exchange Act to integrate crypto trading into its national market structure, opening a 60-day public comment window to shape future formal rules.

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The proposed framework would create a dedicated registration subcategory known as a "crypto asset market" for platforms facilitating leveraged, financed, or margin trades. By codifying industry standards and expanding regulatory oversight, regulators seek to establish proactive compliance safeguards designed to prevent fraudulent schemes before they occur rather than relying strictly on post-hoc enforcement.

"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," CFTC Chairman Michael Selig said in a statement. He added that the announcement fulfills administrative directives to build a comprehensive federal market structure using existing statutory tools.