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CFTC Moves Ahead With Crypto Rulebook Despite CLARITY Setback
- The CFTC plans CTX and CAM frameworks for crypto trading platforms using its existing authority under the Commodity Exchange Act.
- Initial oversight would focus on retail crypto trading involving leverage, margin or financing, while ordinary spot exchanges would not automatically be covered.
- Proposed rules could include proof-of-reserves requirements, customer-asset safeguards and clarification of when self-custody transfers qualify as actual delivery.
- CFTC Chair Michael Selig said the agency would pursue crypto market regulation despite Congress failing to pass the CLARITY Act.
The US Commodity Futures Trading Commission (CFTC) is pressing ahead with plans for a federal crypto framework despite Congress failing to get the CLARITY Act across the line.
In a speech at Fordham University on Monday, CFTC Chair Michael Selig outlined two planned regulatory initiatives covering crypto trading platforms: Regulation Crypto Asset Transactions, or CTX, and Regulation Crypto Asset Markets, known as CAM.
Selig said the agency would rely on powers it already has under the Commodity Exchange Act, although he acknowledged there are limits to how far the CFTC can go without Congress.
Only Congress has the authority to mandate that all crypto asset exchanges register with the Commission.
CFTC Chair Michael Selig Under the proposal, the CFTC would focus first on platforms offering retail customers crypto trades involving leverage, margin or financing. Existing CFTC-registered exchanges could add these products, while firms focused specifically on this type of trading could potentially register under the new CAM category.
Ordinary spot crypto exchanges would not automatically be pulled into the federal regime. Instead, the framework would give companies another regulatory route alongside existing state licensing arrangements.
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Self-Custody and Proof of Reserves
The CFTC is also considering rules designed specifically around the way crypto markets operate.
Among them is a potential proof-of-reserves requirement for platforms that pool customer assets, alongside rules addressing market manipulation, customer funds, conflicts of interest and financial safeguards.
Self-custody is also on the agenda. The agency wants to clarify when crypto transferred to a customer-controlled wallet counts as “actual delivery” under existing commodities law. Under the proposal, transfers completed within 28 days would generally qualify.
Selig also said the agency is examining how existing rules should apply to developers who publish decentralised software without handling customer assets or controlling transactions.
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The move comes after the Securities and Exchange Commission (SEC) began its own crypto rulemaking push in August. The SEC proposed Regulation Crypto Assets, which would create tailored exemptions for certain crypto-related investment-contract offerings as well as a conditional safe harbour.
That proposal arrived before the CLARITY effort failed, suggesting both regulators were already preparing to use their existing legal authority rather than relying entirely on Congress to establish a new framework.
Selig made that direction explicit, saying the administration intended to develop crypto market rules “with or without legislation”.
Read also: SEC and CFTC Signal Crypto Rulemaking Push After Clarity Act Stalls
Author
Aaron Feuerstein
Aaron Feuerstein is a freelance writer based in Melbourne. His focus is on decentralised finance and the regulatory space surrounding blockchain. He holds a Master's in Accounting. When he is not studying the latest legal case, he enjoys his time as a modest but eager hobby cook.
