CFTC opens its own crypto rulebook, starting with leveraged retail trading

The Commodity Futures Trading Commission has started building a federal framework for leveraged crypto trading, using the law it already has. On October 5 it asked for public comment on two planned rules.

The first covers retail crypto transactions that are leveraged, margined or financed. The second creates a new registration category of exchange, the crypto asset market, designed for those trades.

The timing follows the Senate. With the market structure bill dead for this Congress, regulators are filling the space with existing statutes, and commodities law gives the CFTC a way in where leverage is involved. Reuters reports that exchanges could opt into federal oversight under the plan instead of relying only on state money-transmitter licenses. For a platform licensed state by state, a single federal registration is an attractive trade, even if it brings closer supervision.

The limits are just as clear. CoinDesk notes the CFTC still cannot supervise spot trading without leverage, beyond policing fraud and manipulation. Ordinary buying and selling of tokens stays outside this framework, and only Congress can change that.

The process is at an early stage. Comments are due 60 days after the notice appears in the Federal Register, with proposed and final rules to follow. The comment file will show whether large exchanges want the new category.