The US Commodity Futures Trading Commission (CFTC) has initiated the process of developing a regulatory framework for cryptocurrency markets. It has issued a notice in the Federal Register on October 13, 2026, and invited the public to comment on the application of commodity laws to leveraged crypto trading and the platforms that facilitate these transactions.
Source: govinfo.gov
The comment period will close on December 14, 2026. The regulator wants to solicit public input concerning the gaps in the current regulatory environment for cryptocurrencies and leverage.
The CFTC has proposed two alternative regulatory frameworks the Regulation Crypto Asset Transactions (CTX) and Crypto Assets Markets (CAM). The CTX and CAM propose how to oversee leveraged transactions involving crypto assets through either a transaction-based or a market-based approach.
They suggest that crypto assets used as underlying instruments for leveraged transactions with borrowed funds or on a margin could be subject to regulation. Moreover, the CFTC wants to determine the extent to which crypto platforms should be registered and regulated.
Leveraged trading involves using a borrowing facility to increase the size of a position beyond the amount deposited by an investor. Therefore, the size of a loss or profit per trade can be higher than the initial investment in crypto. Thus, the CFTC wants to know whether leveraged crypto trading falls under the CEA’s purview.
We can’t afford to wait for legislation any longer. The @CFTC has the authority to put a regulatory framework in place for crypto markets, and we’re using it.
Watch on @Varneyco: https://t.co/fkEEZ4fEeA
— Mike Selig (@ChairmanSelig) October 8, 2026
One of the issues that the regulator wants the public opinion on is whether the customer receives the actual property interest or entitlement of crypto assets when the transaction is concluded. According to the CFTC, on some centralised crypto platforms, customer funds are accounted for on the books of the platform, which does not necessarily indicate that the crypto is transferred to a customer’s personal crypto wallet.
Furthermore, the CTX and CAM provide the possible approach to regulating the crypto trading platforms and include topics for discussion. Some of the issues are the appropriate listing standards for crypto assets, the surveillance of crypto trading, operations and risk management of crypto trading platforms.
Moreover, CFTC wants to know whether the platforms should analyse specific tokens, including the total supply of tokens, governance structure, open-source code, and the underlying blockchain security features.
The regulator also seeks input concerning the measures to address smart contract risks, the role of validators, and the procedures for responding to emergencies, including ensuring the custody of assets. One of the issues for discussion is whether the crypto platforms should be required to provide third-party, independently audited reports concerning the proof of reserves for the customer’s crypto assets.
The CFTC has also considered the oversight of crypto asset trading and exchange-traded products, including futures. Perpetual-style futures are derivatives that allow investors to bet on the direction of a broad-based index of securities without a specific expiry date.
The regulator has issued a conditional relief to eligible derivatives exchanges to list perpetual-style futures contracts linked to a broadly diversified security index with no expiry date.
Nevertheless, the proposed regulation CTX and CAM are not final rules, and the CFTC is yet to determine whether they should be adopted. Therefore, the October 13 notice is a request for comments. Based on the input from the industry participants, CFTC will decide whether to take further action in developing and adopting new rules to regulate leveraged crypto trading and crypto markets.
The consultation process is a significant development for crypto businesses and investors. It indicates that the CFTC is considering the appropriate regulatory framework for crypto assets and leveraged trading.
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