The Commodity Futures Trading Commission has opened the clock on the first federal rules built specifically for digital-asset trading, proposing a framework that could finally give SEC and CFTC crypto oversight a clear set of guardrails instead of years of enforcement actions. The agency unveiled two draft regulations on October 5, 2026, aimed at exchanges that let retail customers trade crypto assets on margin, leverage or financing.
Key takeaways
- The CFTC proposed Regulation CTX and Regulation CAM on October 5, 2026, its first rules written specifically for crypto exchanges.
- The plan lets registered platforms offer margined, leveraged or financed retail trades without forcing all crypto spot trading onto CFTC-registered venues.
- FTX’s founders misappropriated roughly $8 billion in customer money, yet funds held at its CFTC-registered unit stayed segregated and intact.
- A joint CFTC-SEC interpretation earlier in 2026 found that bitcoin and ether are non-securities falling under CFTC jurisdiction.
- Written public comments are due within 60 days of the notice’s publication in the Federal Register.
CFTC Proposes First Federal Rules for Crypto Exchanges
Regulation CTX and Regulation CAM would set up requirements for CFTC-registered exchanges that offer crypto assets like bitcoin and ether for trading, according to CFTC Chairman Michael S. Selig. Unlike the Clarity Act, the version Congress failed to pass this month, these rules would not require crypto assets to trade exclusively on CFTC-registered platforms. Selig said the agency lacks authority to impose that kind of mandate without congressional action.
What the draft rules would do is create a voluntary, purpose-built option: exchanges that register under the new framework could let retail customers trade on a margined, leveraged or financed basis, something state-licensed spot platforms cannot offer. Crypto.news reported that Regulation CAM would build a crypto-specific category inside the CFTC’s existing designated contract market registration system, while exchanges that already hold that status could adopt tailored rules to add CTX trading. On September 17, the CFTC had already sent its framework—officially titled “Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets”—to the White House Office of Information and Regulatory Affairs, meaning the initiative had already cleared an executive review stage.
Previous Regulatory Approaches and Challenges
Before this proposal, the CFTC and the SEC largely policed crypto through enforcement rather than rulemaking. Under the prior administration, the two agencies went after exchanges, custodians and software developers for alleged violations instead of writing new rules that reflected how crypto markets actually worked. That approach pushed many firms offshore in search of friendlier jurisdictions.
In the meantime, crypto intermediaries operated inside the U.S. largely through state money-transmitter licenses. Those laws, unlike federal rules, have accommodated crypto firms for more than a decade, but they are not uniform from state to state and were built for payment-services providers rather than financial markets. Federal rules, by contrast, demand tougher standards: deterring manipulation, ensuring transparent trading, managing conflicts of interest and safeguarding customer funds.
What FTX’s Collapse Exposed About Custody
FTX is an example of what went wrong. After its founders fraudulently diverted roughly $8 billion in customer funds to finance their own proprietary trading, the Bahamas-based exchange collapsed, with the CFTC and SEC only filing charges against FTX and its founders once the firm had already gone under.
FTX operated in the U.S. the same way BlockFi and Voyager Digital did, through subsidiaries carrying state money-transmitter licenses. Most of FTX’s offshore and state-regulated corporate entities went bankrupt alongside the parent company. The exception was its CFTC-registered subsidiary, where customer property stayed segregated and secure even as the rest of the business collapsed. Selig pointed to that contrast directly, using the FTX example in his October 5 opinion article to argue for a federal registration option, as crypto.news reported.
Bitcoin, Ether and the Regulatory Path Ahead
The new proposal follows a joint interpretation issued by the CFTC and SEC earlier in 2026 clarifying that a range of crypto assets, including bitcoin and ether, are non-securities that fall within the CFTC’s regulatory authority.
Selig framed the proposal as an attempt to avoid repeating past mistakes. “America doesn’t need to choose between responsible innovation and the protection all market participants need” from fraudulent and abusive practices, he wrote, adding that the country “needs prophylactic rules that reasonably ensure both.” He also acknowledged limits to what the agency can do on its own, noting that rulemaking cannot substitute indefinitely for a statutory framework passed by Congress. The proposal arrived after the Senate failed to advance the Clarity Act, rejecting cloture on a motion to proceed by a vote of 49 to 50, short of the 60 votes needed, according to crypto.news.
The CFTC’s advance notice of proposed rulemaking, built around Section 2(c)(2)(D) of the Commodity Exchange Act, asks the public how a national regime could prevent abusive trading practices and what crypto-specific information exchanges should disclose. Written comments are due within 60 days of the notice’s publication in the Federal Register, and the agency said it will post submissions on Regulations.gov.
Article produced with the assistance of artificial intelligence and reviewed by the editorial team.