The Commodity Futures Trading Commission (CFTC) is preparing to develop a new federal regulatory framework for cryptocurrency markets, following the recent failure of Congress to pass comprehensive crypto legislation.
New regulatory initiatives: CTX and CAM
The CFTC announced on Sunday the release of an Advanced Notice of Proposed Rulemaking (ANPRM), opening a 60-day public comment period for input on two proposed regulatory structures: Regulation Crypto Asset Transactions (CTX) and Regulation Crypto Asset Markets (CAM).
This effort utilizes the agency’s existing powers under the Commodity Exchange Act, aiming to outline crypto-specific oversight rules within its jurisdiction. The CFTC’s move signifies a direct response to the current lack of federal standards after lawmakers in Washington were unable to deliver broad-based crypto reform.
CFTC Chairman Michael Selig stated that this new initiative represents a key milestone, aiming to keep the United States at the forefront of the global crypto sector. According to Selig, formal rules are not yet in place, and the commission is soliciting feedback from industry stakeholders to inform the content of future regulations.
The CFTC intends to gather insights from industry participants and the public to shape the regulatory framework, emphasizing that formal crypto rules will take shape only after the comment period and additional rulemaking steps.
Once published in the Federal Register, the ANPRM will trigger the 60-day window for responses from the crypto industry and the broader public.
Three-tiered market approach
Chairman Selig presented a vision for U.S. crypto markets organized into three main regulatory tiers. The first tier covers conventional spot exchanges, where the status quo will largely persist, with ongoing state-level money transmitter rules remaining in effect. The CFTC retains authority to intervene in cases of fraud or market manipulation in this category.
The second tier focuses on platforms offering retail users the ability to trade cryptocurrencies using margin, leverage, or other forms of financing. The agency refers to these transactions as CTXs and plans to develop specific new requirements for them.
The third tier encompasses exchanges facilitating derivatives products such as futures and perpetual swaps. The CFTC’s existing designated contract market regulations already apply to these entities.
The restructuring signals an increased focus by the regulator on investor protection mechanisms, especially concerning trading activities that carry higher financial risks for retail participants.
Mini dictionary: CFTC (Commodity Futures Trading Commission), a US federal agency responsible for regulating the derivatives markets, including futures, swaps, and certain cryptocurrency activities within the bounds of the Commodity Exchange Act.
| Regulatory Tier | Markets/Exchanges Included | Regulation Focus | CFTC Authority |
|---|---|---|---|
| Tier 1 | Spot exchanges | State money transmitter laws | Fraud and market manipulation enforcement |
| Tier 2 | Margin/leverage retail platforms (CTX) | New crypto-specific rules | Direct regulatory framework |
| Tier 3 | Derivatives/futures platforms | Designated contract market (DCM) rules | Full CFTC oversight |
Legislative background
The CFTC’s regulatory initiative comes soon after the US Senate defeated the Clarity Act, the latest proposal aimed at defining a nationwide crypto legal structure. The bill, which required at least 60 votes to move forward, was blocked as four Republicans joined Democrats in opposition.
Had it passed, the Clarity Act would have expanded the CFTC’s role in supervising digital asset markets, creating clearer authority for the regulator in an area often marked by overlapping jurisdictional claims, particularly with the Securities and Exchange Commission (SEC).
For now, the CFTC is working within its current legal mandate while authorities debate the future contours of federal crypto regulation in Congress.
