The U.S. Commodity Futures Trading Commission has begun work to build a federal regulatory framework for retail crypto trading involving leverage, margin and lending. With Congress' CLARITY Act, a crypto market structure bill, failing, the CFTC has moved to write its own rules using existing legal authority.

On Oct. 6, the CFTC and several foreign media outlets said the agency on Oct. 5 released an advance notice of proposed rulemaking (ANPRM) covering crypto transactions involving retail investors' margin, leverage and lending, and began gathering public input. This is an early step to collect market views before finalising formal rules. The comment period runs for 60 days after publication in the Federal Register, and submitted comments will be made public on a regulation portal.

The ANPRM contains two broad regulatory frameworks. The first is the Crypto Transaction Regulation (CTX). The CFTC defines as CTX transactions that allow retail customers to trade crypto using margin, leverage or lending, and is reviewing how to oversee such trading under a single nationwide regulatory system.

The second is the Crypto Asset Market Regulation (CAM). The CFTC proposed allowing exchanges offering CTX to choose registration as an existing designated contract market (DCM), or to register as CAM, a new DCM sub-category tailored to crypto trading. CAM is a separate market structure designed for exchanges that provide only CTX.

Michael S. Selig (마이클 세리그), a CFTC commissioner, said the move is part of efforts to keep the United States as a crypto hub. He said U.S. President Donald Trump has promised to establish a crypto market structure regardless of whether Congress legislates, and explained the CFTC would use its existing authority under the Commodity Exchange Act to build a regulatory regime.

Selig stressed a shift away from enforcement focused on actions after the fact. He said he would set rules to prevent fraud like FTX rather than stopping at post-hoc prosecutions. According to Selig, customer assets held by FTX's U.S. CFTC-registered affiliate were segregated and protected, but customer asset problems arose at another affiliate that held a state money transmitter licence.

Whether a platform offers leverage is a key standard in the proposal. Exchanges that offer only typical spot trading can, in principle, keep the existing structure under state money transmitter regulation. By contrast, exchanges that offer retail customers margin, leverage or lending transactions would become subject to CFTC registration and federal regulation. The CFTC presented this not as a blanket federal registration requirement, but as a pathway where firms can choose between state licensing and federal registration. It added that CFTC registration for exchanges seeking to offer leveraged retail trading is required under current law.

The CFTC also offered an interpretation that crypto could qualify for a physical delivery exception if it is transferred to a customer's external non-custodial wallet within 28 days. By contrast, in a structure where assets remain on an exchange's internal ledger, the transaction could fall under CFTC regulation depending on whether leverage is provided.

CAM-registered exchanges are also expected to face requirements aimed at preventing market manipulation and protecting customer assets. The CFTC proposed reviewing market manipulation risks for listed assets and imposing a proof-of-reserves requirement on exchanges that hold customer assets in omnibus accounts. It also included an approach under which a futures commission merchant (FCM) intervenes in CTX transactions to manage customer accounts and funds, while applying segregation of funds, capital requirements, and anti-money laundering and know-your-customer obligations.

The CFTC's independent move comes as Congress failed to advance the CLARITY Act. The bill aimed to clarify in law a federal regulatory framework for the crypto market and expand the CFTC's role, but it did not make progress in the Senate. The CFTC has therefore begun rulemaking procedures using existing legal authority without waiting for congressional action. But as this is at the ANPRM stage, it still faces the remaining steps of public consultation, a formal proposed rule, and a final rulemaking process.

The U.S. Securities and Exchange Commission is also working on a regulatory framework for crypto. After the CFTC and SEC jointly interpreted in March how federal securities laws apply to crypto assets and trading, the SEC is also pursuing a separate regulatory framework tailored to crypto.