CFTC Proposes Federal Framework for Leveraged Retail Crypto Trading
publishers 16articles 19first reported 5 Oct, 15:59 UTCdeveloping since 5 Oct · 11 editions
The U.S. Commodity Futures Trading Commission proposed rules Monday that would create a federal regulatory framework for cryptocurrency exchanges offering leveraged or margined digital-asset trading to retail customers.
The proposal would establish a new category of CFTC-regulated venue called a “crypto asset market.” Exchanges could opt into the framework rather than relying primarily on state money-transmitter licenses. Participating platforms would face requirements including controls against market manipulation and proof-of-reserves obligations, while registered futures commission merchants would intermediate customer trades.
The agency did not propose specific leverage limits. However, exchanges seeking to offer leveraged transactions would have to clear those products with CFTC staff.
The CFTC is relying on its existing authority over margined or leveraged spot-asset transactions. That approach would bring part of the spot cryptocurrency market under federal supervision but would not close the broader regulatory gap surrounding unleveraged spot trading, which requires congressional action.
“For years, entrepreneurs building on the new frontier of finance faced uncertainty about whether there was a place for them in our markets. We are giving them an answer,” CFTC Chairman Michael Selig said at an event hosted by Fordham University’s law school in New York.
The proposal follows Congress’s failure to advance the Clarity Act, which would have explicitly authorized the CFTC to police spot crypto markets. Without legislation, analysts have said agency regulations could remain vulnerable to court challenges and changes in political leadership.
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Written from 7 articles, 1 with the publisher's own text; 7 independent newsrooms once syndicated copies count as one; this version written 12 h after the record first saw the story; the editor kept it as written.
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- This version written
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