CFTC Moves to Set New Crypto Rules After CLARITY Act Failure

The Commodity Futures Trading Commission (CFTC) is moving ahead with plans for new federal crypto regulations after Congress failed to pass comprehensive digital asset market structure legislation.

The derivatives regulator issued an Advanced Notice of Proposed Rulemaking (ANPRM), seeking public feedback on two potential frameworks: Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM).

The initiative would use the CFTC’s existing authority under the Commodity Exchange Act to develop rules specifically addressing cryptocurrency markets.

“Today's action is a critical step in the CFTC's ongoing efforts to ensure America remains the crypto capital of the world,” CFTC Chairman Michael Selig said.

The announcement marks the beginning of the rulemaking process rather than the adoption of final regulations. Industry participants and other stakeholders will have 60 days to submit comments after the ANPRM is published in the Federal Register.

The CFTC is initially focusing on retail crypto transactions involving margin, leverage or other forms of financing. Selig outlined a three-tier approach for overseeing different areas of the digital asset market.

Traditional crypto spot exchanges would remain primarily subject to existing state money transmitter requirements, although the CFTC would retain authority to pursue fraud and market manipulation cases.

A second category would cover platforms allowing retail customers to conduct leveraged, margined or financed crypto transactions. The CFTC refers to these transactions as CTXs, and they would face a new regulatory framework.

The third category covers cryptocurrency futures, perpetual contracts and other derivatives. These products are already regulated under the CFTC’s designated contract market framework.

The agency’s regulatory push follows the Senate’s failure to advance the CLARITY Act, which sought to establish a broader federal framework for digital assets and expand the CFTC’s statutory authority over crypto markets.

The legislation failed to secure the 60 votes required to move forward, with four Republicans joining Democrats in opposing the measure.

With congressional legislation stalled, the CFTC is now pursuing crypto market oversight through powers already available under existing federal law.