CFTC Unveils Plan to Bring Crypto Exchanges Under Federal Oversight

In brief

• The CFTC published an advance notice outlining Regulation CTX and Regulation CAM, which would let crypto exchanges register as a new type of federally regulated "crypto asset market."
• Under the agency's preliminary reading, merely offering leverage could bring even fully paid trades under CFTC oversight unless customers take actual delivery of their crypto.
• The public has 60 days to comment. Exchanges that don't offer leverage could keep operating under state licenses.

The CFTC wants to give crypto exchanges a federal home, and leverage is the key that unlocks the door.

The agency is moving forward with further rulemaking proposals following the collapse of the Clarity Act, the legislation that would have established the ground rules for most cryptocurrency activity in the United States but last month fell short. The CFTC on Monday published an advance notice of proposed rulemaking, an early step that seeks public input before formal rules are drafted.

Its proposal outlines two linked frameworks: Regulation Crypto Asset Transactions, or Regulation CTX, and Regulation Crypto Asset Markets, or Regulation CAM. The public will have 60 days to comment once the notice appears in the Federal Register.