CFTC Opens Consultation on Federal Crypto Trading Framework

The agency’s advance notice, published October 5, targets retail commodity transactions involving crypto assets. Under the proposed system, firms could seek a single federal registration to offer leveraged or financed trading, activities currently governed by a fragmented patchwork of state money-transmitter laws. CFTC Chair Michael Selig emphasized that while the commission can address market structure gaps, it lacks the authority to mandate registration for all exchanges without new congressional action.

Regulation CAM would create a specialized category within the existing contract market registration system, allowing platforms to adopt tailored rules for digital assets. The framework specifically addresses manipulation risks, including token distribution, vesting schedules, and programmed issuance. Furthermore, the proposal includes a proof-of-reserves requirement for exchanges holding customer property in pooled accounts, a measure intended to prevent the type of fund misappropriation seen in the collapse of FTX. Public comments on the proposal are due within 60 days of its publication in the Federal Register.