The US Commodity Futures Trading Commission opened a rulemaking process for leveraged and margined retail crypto trading on 5 October. Its advance notice seeks comments on a federal framework for transactions covered by section 2(c)(2)(D) of the Commodity Exchange Act. The agency said it was considering rules tailored to crypto-asset transactions and trading venues. Written comments are due within 60 days of the notice's publication in the Federal Register.
The initiative followed Congress's failure to advance broader crypto-market legislation. Reuters reported that the proposed approach would use the CFTC's existing authority over financed, margined or leveraged retail commodity transactions. That authority does not give the agency comprehensive jurisdiction over ordinary spot crypto trading. The CFTC acknowledged that agency action cannot indefinitely replace a statutory framework enacted by Congress.
A FEDERAL OPTION FOR LEVERAGED TRADING
The agency is considering a subcategory of designated contract market registration known as a crypto asset market. Such venues would offer covered transactions under a uniform federal regime rather than relying solely on state money-transmitter licences. Reuters said the contemplated requirements include anti-manipulation controls and proof of reserves. Registered futures commission merchants would intermediate customer trades under the proposed structure.
The advance notice is a consultation document, not an adopted rule. It asks how the commission should prevent abusive practices and translate industry practices into requirements for covered transactions. The CFTC has not fixed leverage limits in the notice. Any later binding requirements would follow further rulemaking informed by public comments.
STATUTORY LIMITS REMAIN
The framework could offer crypto exchanges a single federal route for leveraged retail products, but it would not require all crypto assets to trade on CFTC-registered platforms. The Wall Street Journal reported that the initiative leaves ordinary spot trading outside direct federal market oversight. That distinction preserves a central gap left by the stalled legislation. It also limits how far the regulator can standardise the wider US crypto market through its existing powers.
The next milestone is publication of the advance notice in the Federal Register, which will start the 60-day comment period. The commission will then decide whether to issue specific proposed regulations for crypto-asset transactions and markets. Market participants will be watching the eventual registration, custody, reserves and intermediation requirements. Congressional action would still be needed for a comprehensive federal spot-market regime.