CFTC Seeks Comment on Rules for Retail Crypto Trading and Markets

The Commodity Futures Trading Commission on October 5, 2026 published an advanced notice of proposed rulemaking, or ANPRM, seeking public comment on its intent to establish a comprehensive regulatory framework of fit-for-purpose rules under section 2(c)(2)(D) of the Commodity Exchange Act covering retail commodity transactions involving crypto assets, which the agency calls crypto asset transactions, or CTXs. The agency’s announcement opens a 60-day comment window running from the notice’s publication in the Federal Register; comments must be submitted in writing, and those received will be posted on Regulations.gov.

The notice, titled Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets and filed under RIN 3038-AF80, spans 17 CFR Parts 1, 38, and 39 and was posted as approved by the Commission, subject to pre-publication technical corrections. The Commission said it intends to use the information and comments received to inform potential future agency action, such as a rulemaking, with respect to section 2(c)(2)(D) and CTXs.

The ANPRM solicits comment on three subjects: how the Commission can prevent abusive practices in crypto asset markets and CTXs under a uniform national regime; how it can give market participants crypto asset-specific contextual information on industry practices it has found, based on its oversight of aspects of crypto asset markets since 2014, to represent compliance best practices; and how it can codify through rulemaking a subcategory of designated contract market, or DCM, registration known as a crypto asset market, or CAM, that is purpose-built specifically for CTXs.

Chairman Michael S. Selig called the action “a critical step in the CFTC’s ongoing efforts to ensure America remains the crypto capital of the world,” and said the Commission would take every necessary step to establish regulations designed to prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX.

The notice states that U.S. retail participants in crypto asset markets have relied primarily on state-level regulatory protections, including money transmission licensure regimes that generally apply to crypto asset exchanges, New York’s BitLicense, and California’s Digital Financial Assets license, alongside registration with the Financial Crimes Enforcement Network as money services businesses. Those state licensure regimes, built around payment transactions, do not protect retail customers in the same manner as the federal market structure regulatory framework under the Act, the notice states, because they lack rules designed to ensure orderly and transparent trading and to prevent conflicts of interest and market manipulation.

The notice recounts that an $8 billion fraud at FTX was revealed on November 11, 2022, and cites former Chairman Rostin Behnam’s congressional testimony that customer property held by FTX’s CFTC-registered entities remained segregated and secure, in contrast to 130 other FTX affiliate entities that entered bankruptcy.

The notice places the ANPRM in a policy sequence that began with the President’s Working Group on Digital Asset Markets report of July 30, 2025, which directed the Commission to use its existing rulemaking and exemptive authorities to enable the trading of crypto assets, including facilitating the listing of CTXs. The CFTC announced a Crypto Sprint in August 2025 and requested public input on how DCMs could list and trade CTXs, and on December 4, 2025 the Commission announced that CTXs would trade for the first time on a U.S. regulated exchange. Selig was sworn in as the 16th Chairman of the CFTC on December 22, 2025, and on January 29, 2026 he and SEC Chairman Atkins announced Project Crypto as a joint effort between the agencies. The two agencies entered into a memorandum of understanding on March 11, 2026 and issued a Joint Crypto Asset Taxonomy on March 17, 2026 that classified crypto assets into five categories and listed Bitcoin, Ether, Solana, Stellar, Tezos, and XRP as examples of digital commodities. In August 2026, the SEC proposed Regulation Crypto Assets; the notice states the ANPRM seeks to provide a complementary federal regulatory framework for crypto assets subject to that proposal’s safe harbor and thus freely tradable in secondary markets.

Section 2(c)(2)(D) and Proposed Regulation CTX

Section 2(c)(2)(D)(i) reaches any agreement, contract, or transaction in any commodity entered into with, or offered to, a person that is not an eligible contract participant or eligible commercial entity, on a leveraged or margined basis or financed by the offeror, the counterparty, or a person acting in concert with either. The Dodd-Frank Act amended the CEA on July 21, 2010 to treat such transactions as if they were futures contracts under sections 4(a), 4(b), and 4b of the Act, making it unlawful to offer, execute, confirm the execution of, solicit orders for, or otherwise deal in them unless conducted on or subject to the rules of a DCM. The notice recounts that Congress framed the provision as a fix for the Zelener decision, which had allowed rolling spot contracts documented as cash market transactions to fall outside the Commission’s jurisdiction.

Section 2(c)(2)(D)(ii) excepts, among other contracts, a contract of sale that results in actual delivery within 28 days, or within a longer period the Commission sets by rule based on typical commercial practice in the relevant cash or spot market. The controlling case law dates to 2019, the notice states, when the U.S. Court of Appeals for the Ninth Circuit held in CFTC v. Monex Credit Co. that actual delivery requires real and immediate possession of the commodity by the buyer or the buyer’s agent, and that the transactions at issue, in which the commodities remained in the broker’s chosen depository under the broker’s exclusive control, were merely book entries amounting to sham delivery.

In Section III of the notice, the Commission set out proposed Regulation CTX to explicitly identify certain transactions involving crypto assets that it preliminarily understands to be subject to section 2(c)(2)(D). The notice defines a crypto asset as any digital representation of value recorded on a cryptographically-secured distributed ledger. Selig said the agency also proposes to codify an interpretation of actual delivery clarifying that delivery of a crypto asset to a user’s external, non-custodial digital wallet within 28 days generally satisfies the exception.

Regulation CAM and Customer Protections

In remarks at the Fordham Law Blockchain Regulatory Symposium in New York on October 5, 2026, Selig described the registration landscape as a ladder. Ordinary spot crypto exchanges sit on the first rung, subject to the CFTC’s anti-fraud and anti-manipulation authority but otherwise generally regulated under state money transmission laws. The second rung holds exchanges that offer retail customers the ability to trade crypto assets on a margined, leveraged, or financed basis, which are required to register with the CFTC, and the third holds exchanges that also offer perps and other types of derivatives. He said the initial proposals would establish a framework for exchanges on the second rung: DCMs already registered with the CFTC could begin offering CTXs under tailored rules, while non-registrants wishing to offer only CTXs could register either as an ordinary DCM or as a CAM.

A CAM would adhere to the statutory DCM core principles under a tailored set of regulations purpose-built for CTXs, Selig said, while an exchange offering futures, options, or swaps would remain subject to the current DCM framework. For Core Principle 3, which requires a showing that a listed contract is not readily susceptible to manipulation, he said DCMs and CAMs listing CTXs may have to consider the distribution method and concentration of crypto assets, lock-up periods and vesting schedules, and whether there are programmatic issuances or buybacks. The Regulation CAM proposal also contemplates a proof-of-reserves obligation for exchanges that maintain customer property in omnibus accounts held for customers’ benefit.

The proposed rules further contemplate required intermediation of CTXs by futures commission merchants, or FCMs, which would manage customer accounts and funds subject to the Act’s disclosure, capital, and customer property segregation requirements. Selig said requiring FCM intermediation also ensures that customer-facing activity on a CAM would be subject to the Bank Secrecy Act’s anti-money-laundering, customer identification, and suspicious activity reporting requirements.

Writing the same day in a Wall Street Journal opinion piece, Selig said that following the Senate’s failure to advance the Clarity Act this month, the CFTC is proposing rulemaking on Regulation CTX and Regulation CAM. Unlike the Clarity Act, he wrote, the regulations would not require crypto assets to trade on CFTC-registered platforms. “We don’t have the authority to impose such a requirement without congressional action,” he wrote, adding that the rules would establish a purpose-fit option under which registered exchanges, unlike state-licensed exchanges, could permit retail customers to trade on a margined, leveraged, or financed basis.

The notice directs inquiries to Office of the General Counsel staff, including General Counsel Tyler S. Badgley, Deputy General Counsel for Regulation Aaron Levine, and Senior Assistant General Counsel Sean Yoo, and to Michael J. Passalacqua, head of the Innovation Task Force, and Senior Advisor Hank Balaban. Comments may be submitted through Regulations.gov or by mail or courier to Christopher Kirkpatrick, Secretary of the Commission, at the agency’s Washington, DC headquarters.