The Commodity Futures Trading Commission (CFTC) is seeking public input on potential new rules for certain retail cryptocurrency transactions.
- The CFTC is giving the public 60 days to submit comments.
- The agency is considering new anti-fraud measures, clearer regulatory requirements, and a new category for certain crypto markets.
- The proposal focuses on certain retail commodity transactions involving digital assets.
The CFTC on Monday published an Advance Notice of Proposed Rulemaking (ANPRM), which allows the agency to gather information and public feedback before potentially proposing new rules. Comments must be submitted within 60 days of the ANPRM’s publication in the Federal Register.
The potential framework could bring certain U.S. crypto transactions under the CFTC’s regulatory oversight using authority the CFTC already has under the Commodity Exchange Act (CEA). This comes weeks after the Senate failed to advance the CLARITY Act, a broader cryptocurrency market structure package that would have expanded the CFTC’s role in regulating portions of the digital asset market.
The potential changes fall into three main areas: consumer protections, regulatory clarity, and a new category for crypto trading.
First, the CFTC is considering new consumer protections and anti-fraud measures. It wants to become more proactive in preventing abusive practices and fraudulent schemes instead of relying primarily on enforcement after customers have already lost their money.
The agency also wants feedback on how current rules should apply to crypto and how companies can meet those requirements.
Finally, the CFTC is considering a new registration category for certain crypto markets, including a subcategory of Designated Contract Market registration called a “crypto asset market.”
“Today’s action is a critical step in the CFTC’s ongoing efforts to ensure America remains the crypto capital of the world,” CFTC chairman Michael S. Selig said in the announcement. “The American people deserve clarity, certainty, and consumer protections in the crypto asset markets and the agency is committed to delivering this by incorporating crypto asset transactions into its uniform national market regulatory framework.”
Existing authority
The CFTC already regulates parts of the cryptocurrency market. It regulates crypto derivatives, including futures tied to assets such as Bitcoin. The agency can also take enforcement action against parties that violate applicable rules.
Spot trading - the immediate buying and selling of digital assets - generally falls outside the CFTC’s direct regulatory jurisdiction, although the agency can pursue certain illegal activity.
The framework under consideration would not simply give the CFTC control over all spot crypto trading. Rather, it focuses on certain retail commodity transactions, including crypto transactions that are leveraged, margined, or financed rather than purchased outright.
“The Commission’s announcement begins our process of new rulemakings grounded in the CEA’s purpose and President Trump’s directive to propose a federal crypto asset regulatory market structure using the CFTC’s existing statutory authorities,” Selig said. “Under my leadership, the Commission will take every necessary step to establish regulations that are designed to prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX.”
