CFTC chair proposes federal framework for leveraged crypto trading
Regulation & Gov ·
Mike Selig has outlined rules that would let crypto exchanges opt into federal oversight and offer leveraged spot trading to retail customers.
The proposal centers on two new regulatory structures, Regulation CTX and CAM, which would classify major cryptocurrencies as digital commodities and set up a new "crypto asset market" exchange category, according to TheBlockCo. Under the framework, leverage is the key trigger for oversight: platforms that want to offer leveraged trading to retail users would need to register under the new federal licensing structure rather than operate outside it, as detailed in reporting on the CFTC rulemaking.
The plan also introduces new rules for futures commission merchant intermediation and custody, aimed at tightening how customer funds are held and segregated. Part of the stated rationale is customer fund protection and preventing a repeat of FTX-style collapses, where commingled or misused customer assets led to large losses. By building federal pathways for exchanges to register and offer leveraged products under CFTC supervision, the proposal is meant to bring activity that currently sits offshore or in unregulated venues into a licensed, auditable structure.
Coverage of the announcement has been corroborated across multiple outlets, with at least six distinct sources tracking the story, including a report from wublockchain.xyz. The proposal arrives as spot trading itself remains the foundational layer of crypto markets, with direct ownership of assets like Bitcoin and Ethereum underpinning everything from retail exchanges to institutional ETFs, a dynamic explored in a broader explainer on spot trading mechanics. Background on the CFTC's role in shaping that market structure is also tracked via leviathan.news's CFTC atlas.
Separate coverage frames the same proposal as a federal licensing framework for crypto exchanges generally, with leverage trading serving as the regulatory trigger point, a framing echoed in Decrypt's report on the plan.
What remains unresolved is the formal rulemaking timeline, including whether Regulation CTX and CAM will proceed through notice-and-comment and when exchanges could begin registering under the new categories. Also unclear is how existing offshore leveraged trading platforms would be treated during any transition period, and whether retail leverage limits or margin requirements will be specified in a subsequent draft.