CFTC Moves To Bring More Crypto Trading Under Federal Oversight. Exchanges Would Get A New Regulatory Path.

The U.S. Commodity Futures Trading Commission is moving to establish a new federal regulatory framework for crypto exchanges offering leveraged trading to retail customers, opening a path for some platforms to operate under nationwide CFTC oversight rather than relying primarily on state money-transmitter licenses.

The CFTC published an advanced notice of proposed rulemaking covering what it calls "crypto asset transactions," or CTXs -- retail commodity transactions involving digital assets that are conducted on a margined, leveraged or financed basis. The agency is seeking public comments before moving to potential formal rules.

Under the framework outlined by CFTC Chairman Michael Selig, exchanges that only want to offer those transactions could seek registration under a new subcategory of designated contract market called a crypto asset market, or CAM. Existing CFTC-registered designated contract markets could also offer CTXs under tailored rules.

The proposal would not require every U.S. spot crypto exchange to register with the CFTC. Selig said ordinary spot exchanges could continue operating primarily under state money-transmission regimes, while exchanges offering leveraged, margined or financed retail crypto transactions would fall under the federal framework.