The Commodity Futures Trading Commission has set out plans to bring crypto exchanges that offer leverage to retail traders under federal oversight.
The agency published an advance notice of proposed rulemaking, the earliest formal step towards new rules, covering two linked frameworks: Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets. It is asking for public comment before it drafts the rules themselves.
What it would do
The plan would create a new federal “crypto asset market” licence. Exchanges offering leverage, margin or financing on retail spot crypto trades would have to register with the CFTC and be treated much like futures exchanges.
Those trades would run through futures commission merchants and brokers subject to anti-money laundering rules. Leverage could come only from sponsored brokers or banks. An exchange could register as its own broker and clearinghouse.
The legal basis is a 2010 Dodd-Frank provision that already requires leveraged, margined or financed retail commodity trades to take place on CFTC-registered venues.
CFTC Chairman Michael Selig said the framework is “designed to prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX.”
The gap it leaves
The plan reaches only the leveraged side of the market. Exchanges that offer plain spot trading, with no leverage, margin or financing, could carry on under state money transmitter licences as they do now.
That leaves the largest gap in US crypto oversight in place. Federal rules for unleveraged spot trading were meant to come from the CLARITY Act, which failed in the Senate in September. The CFTC sent this framework to the White House the same month.
What happens next
Nothing changes for traders yet. The comment period runs for 60 days once the notice is published in the Federal Register. After that, the CFTC would still need to issue a formal proposal and then a final rule.
