The Commodity Futures Trading Commission (CFTC) has initiated a process to establish a federal regulatory framework for retail trading of leveraged and margin cryptocurrencies, including a new registration category for 'exchanges' offering such products.
According to the regulator, the CFTC is studying the creation of a new category of "cryptoasset market" for CFTC-registered 'exchanges' that can offer these products under a single federal regulatory regime, through proposed rules called Regulation CTX and Regulation CAM. The proposal would provide an alternative to state-licensed 'exchanges', but would not require that cryptoassets be traded on CFTC-registered platforms without Congressional intervention.
"The measure taken is a fundamental step in the CFTC's ongoing efforts to ensure that the United States remains the global capital of cryptocurrencies", stated Michael S. Selig, chairman of the regulator, "Americans deserve clarity, legal certainty, and consumer protection in cryptoasset markets, and the agency is committed to providing it by incorporating cryptoasset operations into its national and uniform regulatory framework for markets."
"The Commission's announcement initiates our process of developing new rules based on the goals of the CEA and President Trump's directive to propose a federal regulatory structure for the cryptoasset market using the existing legal authorities of the CFTC. Under my leadership, the Commission will take all necessary steps to establish standards designed to prevent, rather than merely pursue fraudulent schemes like that of FTX," he added.
The Regulation CTX and Regulation CAM would establish the requirements that CFTC-registered 'exchanges' offering cryptoassets for trading should meet, Selig wrote in a column for 'The Wall Street Journal'. Unlike the Clarity Act, these rules would not require that cryptoassets be traded on CFTC-registered platforms.
The CFTC and the U.S. Securities and Exchange Commission (SEC) have intensified efforts to establish regulations for cryptocurrencies after the Clarity Act failed to pass the Senate last month. For example, the SEC published its long-awaited exemption for innovation, while the CFTC previously submitted a cryptoasset regulation proposal to the White House, advancing without waiting for Congress.
