CFTC Proposes First Federal Rules for Leveraged Retail Crypto Trades, Leaving Spot Markets to States

The CFTC published an advance notice of proposed rulemaking for Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM), initiating a 60-day public comment period. The proposals exclusively target retail crypto trades conducted on a margined, leveraged, or financed basis, leaving plain spot markets under existing state money transmission laws. Requirements under consideration include proof-of-reserves obligations for omnibus accounts and mandatory intermediation by futures commission merchants subject to Bank Secrecy Act rules. Users who move crypto assets to their own non-custodial wallets within 28 days would satisfy an "actual delivery" clause, keeping those specific trades off the exchange mandate. "I want to underscore that this is a federal option for crypto asset exchanges." — CFTC Chairman Michael Selig