CFTC unveils first formal crypto market rules, moving past enforcement-only era
Regulation & Gov ·
The agency proposed its initial round of crypto market regulations, named CTX and CAM, aiming to replace years of policing the industry through lawsuits alone.
The Commodity Futures Trading Commission has proposed its first formal rules for crypto markets, a step described in a Wall Street Journal opinion piece as a departure from the agency's prior reliance on enforcement actions against exchanges, custodians and software developers. The new framework, built around two regulations known as CTX and CAM, is intended to establish clearer rules for how crypto assets and firms operate under federal oversight rather than relying on case-by-case litigation.
Under the previous approach, the CFTC and the Securities and Exchange Commission used their statutory authority to pursue alleged violations rather than issue rules tailored to the market's growth, a dynamic the Wall Street Journal piece says pushed many crypto firms to relocate overseas. Congress had considered legislation to clarify how crypto assets should be treated under federal law and to regulate firms in the space, but no bill reached the president's desk, leaving the CFTC and SEC to act under their existing rulemaking powers.
CFTC Chair Selig has detailed how Regulation CTX and CAM would classify major cryptocurrencies as digital commodities, while introducing new intermediation rules for futures commission merchants and new custody requirements. The proposal also sets out a federal licensing framework for crypto exchanges, with leveraged trading serving as the key trigger for regulatory oversight, and creates a new "crypto asset market" exchange category aimed specifically at leveraged retail crypto trading.
The CFTC and SEC are reported to be jointly developing the CTX and CAM guidelines as a substitute for the stalled CLARITY Act, signaling a broader shift toward proactive rulemaking rather than waiting on Congress, according to wublockchain.xyz. The CFTC has opened a public comment period on the proposed rules governing crypto asset transactions and markets, allowing stakeholders to weigh in before any final framework is adopted.
What remains unresolved is how the SEC's parallel rulemaking will align with the CFTC's proposal, and whether the licensing and custody requirements will be finalized as currently outlined or revised after public comment. The length of the comment period, the timeline for final rules, and how exchanges currently operating abroad might respond are not yet specified in the available material.