The CFTC opened rulemaking on Oct. 5 for two proposed regimes — Regulation Crypto Asset Transactions (CTX) and Regulation Crypto Asset Markets (CAM) — that together would create a national framework for platforms offering retail customers margined, leveraged, or financed crypto trading. The agency says it is leaning on authority it already has under Section 2(c)(2)(D) of the Commodity Exchange Act, which covers certain leveraged retail commodity transactions, while Congress has yet to pass comprehensive spot market legislation.
Three paths, one of them optional
The structure laid out by the agency gives crypto platforms three regulatory routes. Ordinary spot exchanges could stay primarily under state licensing regimes, supplemented by the CFTC's existing anti-fraud and anti-manipulation authority. Platforms that want to offer leveraged or financed retail crypto transactions could seek federal registration under the new framework. Venues listing futures, perpetuals and other derivatives would remain under the existing designated contract market regime.
Participation is voluntary for ordinary spot exchanges. The CFTC acknowledges it cannot compel the broader crypto market onto CFTC-regulated venues without Congress acting. The draw, instead, is product access: federal registration is the only route to leveraged offerings that state money-transmitter licensing alone doesn't provide.
What CAM operators would have to do
Firms registering under CAM would face the core requirements associated with designated contract markets — financial integrity rules, surveillance, conflicts-of-interest standards and operational safeguards. The agency is also weighing crypto-specific criteria for assessing whether an asset can trade without being readily susceptible to manipulation, including token concentration, distribution methods, vesting schedules, lockups, programmatic issuance and buybacks.
Platforms holding customer property in omnibus accounts could face proof-of-reserves requirements. Customer CTX trades would run through registered futures commission merchants, putting customer accounts and property under rules covering capital, disclosures and segregation. FCM involvement also pulls customer-facing activity into Bank Secrecy Act obligations, including anti-money laundering requirements.
Selig's FTX framing
CFTC Chairman Michael Selig tied the initiative directly to the collapse of FTX, arguing regulators should build preventive safeguards rather than lean primarily on enforcement after customers have already lost money. "The lesson from FTX's failure should have been obvious," Selig said on Oct. 5, making the case that protecting customers from fraud and allowing responsible crypto innovation are not competing goals. He linked the proposed proof-of-reserves requirement to the risks that FTX's bankruptcy exposed.
The trade-off for vertically integrated venues
Hyperliquid Policy Center said the proposal could hand market participants a clearer regulatory ladder: state licensing for ordinary spot activity, federal CFTC oversight where leverage enters the picture, and the existing derivatives framework on top. Larry Florio, deputy general counsel at Ethena Labs, called retail leverage the proposal's central attraction and argued it could be enough on its own to pull exchanges voluntarily into a single federal framework.
The pitch lands against a long-standing product gap. Leveraged trading and perpetual contracts have helped offshore venues attract active traders and generate substantial volumes, while US platforms have generally kept a narrower menu because of regulatory constraints. Accepting CFTC oversight, though, could force changes to the vertically integrated model many crypto venues use, where exchange, brokerage and custody sit under one roof.
The comment period and the agency's next procedural steps will determine how quickly any of this becomes operative — and whether Congress moves on spot market legislation in the meantime.
