CFTC Floats Rules for Leveraged Crypto Exchanges: Regulation CTX, CAM

The U.S. Commodity Futures Trading Commission on Monday, October 5, took its first formal step toward a federal rulebook for leveraged crypto trading. The agency published an advance notice of proposed rulemaking on two frameworks, Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM), and opened a 60-day public comment period that starts once the notice appears in the Federal Register.

A new type of exchange, but no spot oversight

The proposals would create a new registration category, the "crypto asset market" (CAM), described by CoinDesk as a narrower version of the existing designated contract market (DCM). A CAM would have to follow the statutory DCM core principles, but under a set of rules tailored to crypto transactions that are leveraged, margined or financed. Platforms already registered as DCMs include Coinbase, Crypto.com, Bitnomial, Kalshi and Polymarket.

The key practical change concerns retail customers. "Unlike state-licensed exchanges, these exchanges would be permitted to allow retail customers to trade on a margined, leveraged or financed basis," CFTC Chairman Michael Selig wrote in a Wall Street Journal op-ed the agency republished.

The framework does not cover plain spot trading, the largest segment of the market, including ordinary purchases of bitcoin and ether. The CFTC lacks authority over those transactions beyond fraud and manipulation enforcement, and spot platforms remain under state money-transmission rules. Nor can the agency force crypto trading onto its venues. "We don't have the authority to impose such a requirement without congressional action," Selig said, according to The Block.

Selig framed the effort as a response to past failures. The CFTC will establish regulations "designed to prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX," he said in the agency's release, calling it a step to "ensure America remains the crypto capital of the world."

The move follows the Senate's failure in September to advance the Digital Asset Market Clarity Act, the market-structure bill that would have split crypto oversight between the CFTC and the SEC. With legislation stalled, both agencies are pursuing their own rulemaking; both are currently led solely by Republican commissioners, CoinDesk noted. In a separate deregulatory step, the Treasury's FinCEN withdrew its 2020 proposal to require reporting of transfers over $10,000 to self-custody wallets and its 2023 crypto-mixer proposal.

What it means

An advance notice is the earliest stage of rulemaking: nothing changes for traders today, and the final rules could look different after comments. Still, the direction is clear. U.S. regulators are building a legal route for onshore leveraged crypto products, the business that has largely lived on offshore exchanges. Spot markets for bitcoin and ether, however, will stay without a single federal regulator until Congress acts. We follow regulatory news in the daily brief.