The US commodities regulator, the Commodity Futures Trading Commission (CFTC), on Monday proposed a new federal regulatory framework for cryptocurrency exchanges offering leveraged digital asset trading, aiming to bring parts of the spot crypto market under federal supervision. The move comes weeks after Congress failed to make progress on broader cryptocurrency legislation.
Under the proposal, US crypto exchanges would be able to opt into a federal regulatory regime rather than primarily operating under a fragmented system of state-level money-transmitter licences, the regulator said.
The proposed framework relies on the CFTC’s existing authority to oversee margined and leveraged spot assets. The agency has for years sought broader powers to regulate spot cryptocurrency markets, which currently operate in a regulatory grey area. However, granting the CFTC comprehensive oversight of the spot crypto market would require action from Congress.
“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,” said Chairman Michael S. Selig.
Selig further highlighted that the Commission’s announcement begins the process of new rulemaking grounded in the CEA’s purpose and President Trump’s directive to propose a federal crypto asset regulatory market structure using the CFTC’s existing statutory authorities.
“Under my leadership, the 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,” he added.
New rules to establish a new trading category
Under the proposed framework, the CFTC plans to create a new category of regulated trading platforms called “crypto asset markets” for exchanges that provide leveraged or margined trading to retail investors. Such platforms would have to meet specific regulatory requirements, including safeguards against market manipulation and mandatory proof-of-reserves disclosures.
The CFTC also proposes requiring registered futures commission merchants to act as intermediaries for customer transactions conducted on these newly designated exchanges.
While the agency has not proposed fixed leverage limits, exchanges offering leveraged products would need to obtain clearance from CFTC staff before listing such transactions.
The proposed framework comes after Congress failed to move forward with the Clarity Act, a major cryptocurrency bill that sought to establish a clearer regulatory framework for the roughly $2 trillion crypto market. The legislation would have provided greater legal certainty to the industry and explicitly granted the CFTC authority to oversee spot cryptocurrency markets.
With lawmakers unable to reach an agreement, the responsibility for providing regulatory clarity has increasingly shifted to crypto-friendly regulators appointed by US President Donald Trump, particularly the Securities and Exchange Commission and the CFTC.
However, analysts caution that regulations introduced without congressional legislation could remain vulnerable to changes in the political environment and potential legal challenges, leaving the crypto industry exposed to continued regulatory uncertainty.
Crypto prices today
Bitcoin remained under pressure on Tuesday, October 6, trading in the $85,000-$86,000 range after briefly approaching the $87,000 mark, as investors continued to weigh elevated US Treasury yields against expectations that the Federal Reserve could adopt a less hawkish stance.
Ethereum was trading near $2,700, while XRP and Solana were hovering around $1.50 and $120, respectively.
“Bitcoin is consolidating near the $85,500-$86,000 range after another attempt to move above $87,000. The broader momentum remains constructive, although rising US bond yields are keeping some pressure on the market. Holding above the $85,000 level will be important for maintaining near-term strength,” said Avinash Shekhar, Co-Founder & CEO, Pi42.
(With inputs from Reuters)
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