On October 5, 2026, the U.S. Commodity Futures Trading Commission published an advance notice of proposed rulemaking (ANPRM) previewing two related regulations — Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM) — that would, for the first ...
"President Trump promised to deliver a crypto asset regulatory market structure with or without legislation, and we will help him deliver it using our existing statutory authorities." — Michael S. Selig, Chairman, U.S. Commodity Futures Trading Commission
On October 5, 2026, the U.S. Commodity Futures Trading Commission published an advance notice of proposed rulemaking (ANPRM) previewing two related regulations — Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM) — that would, for the first time, create a purpose-built federal framework for retail leveraged crypto trading. The initiative arrived 20 days after the CLARITY Act, Congress's most ambitious attempt at a statutory crypto market-structure law, failed a Senate cloture vote 49-50 on September 15.
The proposed framework targets a specific gap: retail leveraged and margined crypto trading, a product category that currently lives almost entirely on offshore venues. Global crypto derivatives volume reached approximately $35 trillion in H1 2026, or $194 billion per day, according to CoinPerps data. Perpetual futures alone account for roughly 78% of all crypto derivatives activity. U.S. exchanges have been largely locked out of this segment until May 2026, when the CFTC approved Coinbase Financial Markets and Kalshi to list onshore perpetual futures products.
The ANPRM's comment period closes December 14, 2026. If finalized, Regulation CTX and Regulation CAM would establish the first federal registration pathway for crypto exchanges operating outside the existing designated contract market (DCM) derivatives framework — a regulatory instrument the CFTC concedes it has "never used" to issue purpose-fit rules for leveraged crypto spot trading.
The CLARITY Act, introduced by Senate Banking Committee leadership, would have drawn a statutory line between SEC and CFTC jurisdiction over digital assets, granting the CFTC exclusive authority over "digital commodity" spot markets. On September 15, 2026, the bill failed cloture 49-50, eleven votes short of the 60 required. All Democrats present voted against it. Three Republicans — Susan Collins, Josh Hawley, and Jerry Moran — also voted no. Senator Chris Coons did not vote.
The failure left the agencies in an improvised position. Within 48 hours of the CLARITY Act's defeat, both the SEC and CFTC signaled independent rulemaking agendas. CFTC Chairman Selig had already telegraphed this outcome: in an August 21 statement, he said the CFTC would "write its own digital-asset market-structure rules" if legislation stalled.
The October 5 ANPRM is the result. The CFTC's legal basis rests on Section 2(c)(2)(D) of the Commodity Exchange Act (CEA), a provision added in 2010 that requires retail commodity transactions involving margin, leverage, or financing to trade on designated contract markets unless an exception applies. The CFTC has enforced this provision against exchanges — including actions against Kraken and Ooki DAO — but had never used it to create tailored rules.
Regulation CTX defines when a retail crypto asset transaction falls under CFTC jurisdiction. The trigger is the offer of leverage, margin, or financing — not the execution.
Three interpretive positions anchor the proposal:
Broad definition of "offer." The CFTC's preliminary view is that a platform offering leverage options to retail customers — through standard account-opening documents, terms of service, or margin agreements — brings those transactions within Section 2(c)(2)(D). This applies even if the customer rejects the leverage and pays in full. The mere availability of leverage on the venue creates federal jurisdiction.
"Acting in concert" captures third-party credit. If a platform sets the terms, markets, shares revenue from, or provides material assistance to third-party financing arrangements, those transactions qualify as financed. This broadens the jurisdictional net beyond direct platform lending.
"Actual delivery" requires private keys. A customer must possess private keys and have unfettered access to governance and staking rights. Book-entry positions on an exchange's ledger do not constitute delivery. Internal credits do not qualify. The practical implication: any exchange holding customer assets in omnibus wallets while offering leverage options would fall within the framework.
The ANPRM explicitly defines crypto assets as "any digital representation of value that is recorded on a cryptographically-secured distributed ledger," but excludes payment stablecoins regulated under the GENIUS Act.
Regulation CAM creates a new subcategory of designated contract market — the Crypto Asset Market — designed for venues listing only crypto asset transactions involving leverage, margin, or financing. CAMs would be governed by tailored "CAM Core Principles," adapted from existing DCM requirements but modified for crypto-specific characteristics.
Key requirements:
Chairman Selig described the underlying framework as a three-rung ladder:
Rung 1: Ordinary spot trading. Fully paid purchases with actual delivery. These remain subject to state regulation and outside the CFTC's on-exchange requirement. On-chain trading protocols that transfer assets directly to customer wallets satisfy actual delivery requirements, according to the CFTC's preliminary view.
Rung 2: Crypto Asset Transactions (CTXs). Retail crypto purchases involving leverage, margin, or financing. These fall under CFTC jurisdiction and must trade on registered CAMs with FCM intermediation. This is the framework's primary target.
Rung 3: Crypto derivatives. Perpetual contracts and other derivative instruments. These remain under the existing DCM and derivatives clearing organization (DCO) framework.
The ladder's architecture means a single exchange could theoretically operate across all three rungs — but each rung carries different registration, intermediation, and clearing obligations.
All Rung 2 transactions require intermediation by Futures Commission Merchants (FCMs). The ANPRM specifies that financing may be extended only by an "eligible leverage provider," defined as either the intermediating FCM itself or a qualified banking institution sponsored by the FCM.
The custody regime presents unresolved questions. The CFTC seeks comment on crypto-specific practices including continuous margining, automated liquidation protocols, customer asset segregation, and permitted depositories. A critical open issue: whether CTXs intermediated by FCMs but not cleared through DCOs qualify for Bankruptcy Code protections. The CFTC is exploring whether Uniform Commercial Code Article 8 protections could serve as alternatives.
The framework permits vertically integrated structures — CAMs could register as FCMs or DCOs or operate through affiliated entities — but requests input on managing conflicts of interest in such arrangements.
The ANPRM deliberately leaves purely unleveraged spot trading outside its scope. Chairman Selig acknowledged that "agency action cannot substitute indefinitely" for statutory authority. Without legislation, the CFTC cannot regulate Rung 1 spot markets. State money-transmitter licenses remain the primary regulatory instrument for that segment.
This creates an asymmetry. An exchange offering only spot trading answers to 50 state regulators. The same exchange offering spot-plus-leverage answers to the CFTC under a single federal framework, with potential preemption of conflicting state laws. The incentive structure may push exchanges toward offering leverage specifically to access a unified federal regime.
The CFTC is not operating in isolation. The SEC proposed its own "Regulation Crypto Assets" on August 18, 2026, creating tailored offering exemptions: a startup exemption allowing up to $5 million over four years, and a fundraising exemption with Tier 1 ($20 million over 12 months) and Tier 2 ($75 million over 12 months) pathways.
The two agencies are nominally coordinating. On March 11, 2026, the SEC and CFTC signed a memorandum of understanding on overlapping jurisdiction. On March 17, they issued a joint 68-page interpretation naming 16 major crypto assets — including Bitcoin, Ethereum, and Solana — as digital commodities, not securities. The interpretation also classified mining, staking, wrapping, and airdrops as generally falling outside securities law.
However, the simultaneous, parallel rulemaking processes carry coordination risk. The SEC's framework addresses offerings and investment contracts. The CFTC's framework addresses trading and market structure. The boundary between them — when does a commodity transaction become an investment contract? — remains contested ground that the CLARITY Act was designed to resolve.
The market has responded before the rules are final. On October 26, 2026, Hyperliquid announced that Kraken parent Payward would be the first CFTC-regulated deployer on its HIP-3 permissioned markets. Bitnomial, Payward's CFTC-regulated designated contract market and DCO, would act as the deployer. NinjaTrader Clearing, Payward's CFTC-registered FCM, would carry client accounts. The functionality is on testnet; deployment is subject to regulatory approval.
This structure is notable: a decentralized trading protocol (Hyperliquid, processing roughly $240 billion in 30-day volume) building permissioned-market functionality specifically to accommodate a CFTC-regulated operator. It represents an early test case for hybrid on-chain/regulated structures.
Coinbase Financial Markets became the first FCM approved by the CFTC to offer onshore perpetual futures to U.S. traders in June 2026, following May 29 approval. That approval preceded the Regulation CTX/CAM ANPRM and operated under existing DCM rules rather than the proposed new framework.
The CFTC's proposal addresses a measurable economic value gap. U.S. retail investors have been largely excluded from leveraged crypto trading, a segment generating hundreds of billions in monthly volume on offshore venues. Global crypto derivatives volume hit approximately $85.7 trillion in 2025. Combined perpetual futures volume rose 75% in two years, from $4.14 trillion in January 2024 to $7.24 trillion in January 2026, per CoinPerps data.
Whether the framework creates net economic value depends on several factors:
Fee capture. Exchanges operating under Regulation CAM would generate trading fees, financing charges, and clearing revenue currently accruing to offshore venues. The CFTC explicitly frames this as repatriating a "trillion-dollar offshore business."
Compliance cost. FCM registration, continuous margin systems, blockchain surveillance, and custody infrastructure represent material operating expenses. Whether leverage generates enough additional volume and revenue to justify those costs remains an open question.
Customer protection. The framework mandates customer asset segregation, disclosures, and margin requirements absent from most state-licensed venues. The CFTC cited the FTX collapse — where $8 billion in customer funds were misappropriated — as a direct motivating case. Chairman Selig stated: "Four years ago, we saw the collapse of Sam Bankman-Fried's FTX, where he stole over $8 billion in customer funds. That can't happen under our regime."
Self-custody preservation. The framework explicitly affirms self-custody rights. Selig stated: "We absolutely believe in the right to self-custody your assets and protect your own privacy in onchain transactions." Transactions resulting in actual delivery to customer-controlled wallets fall outside the on-exchange requirement.
The CFTC's ANPRM represents the most specific federal attempt to date to construct a regulatory framework for retail crypto trading from existing statutory authority rather than new legislation. The Commission is, in effect, building what Congress failed to pass — a federal registration pathway for crypto exchanges — using a 2010 provision originally designed for retail commodity transactions.
The approach carries inherent limitations. Without statutory backing, the framework cannot reach purely spot markets, creating an incentive structure that may distort market behavior. Preemption of state laws remains tentative. Bankruptcy protections for customer assets are uncertain. And the parallel SEC rulemaking introduces overlap risk that the CLARITY Act was explicitly designed to eliminate.
The comment period, closing December 14, will determine whether the framework advances to a formal proposed rule. Eight rulemaking items from Chairman Selig since June 2026 suggest intent to finalize independently of congressional timelines. The operational question is whether a framework built on enforcement-era statutory provisions can support a market that clears $194 billion per day.