BLOCKCHAIN—CFTC seeks comment on...

By Rebecca E. Hoffman, J.D.

Comments are due 60 days after the notice is published in the Federal Register.

The CFTC announced its advanced notice of proposed rulemaking pertaining to “Regulation CTX” (crypto asset transactions) and “Regulation CAM” (crypto asset markets), seeking public comment on the specifics in its attempt to develop rules implementing CEA Section 2(c)(2)(D) in the context of crypto assets. The “fit for purpose” rules will be aimed at protecting the public from fraudulent schemes without regulating “by enforcement,” and are intended to provide a framework for conducting CTXs lawfully.

“‘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 chair Michael S. Selig said in the press release. “‘[T]he Commission will take every necessary step to establish regulations that are designed to prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX.’”

In August, at the first meeting of the CFTC’s Innovation Advisory Committee, a group representing every corner of both traditional and modern financial markets wondered aloud how it might be possible to bring crypto asset trading under the federal umbrella, the notice recounted. The industry leaders expressed their wish for progress toward regulatory clarification.