The U.S. Commodity Futures Trading Commission on October 5 issued an Advanced Notice of Proposed Rulemaking (ANPRM) proposing two new regulatory categories — Regulation CTX and Regulation CAM — designed to bring leveraged, margined, and financed retail crypto trading under federal oversight. The ...
"Today's action is a critical step in the CFTC's ongoing efforts to ensure America remains the crypto capital of the world." — Michael Selig, Chairman, U.S. Commodity Futures Trading Commission
The U.S. Commodity Futures Trading Commission on October 5 issued an Advanced Notice of Proposed Rulemaking (ANPRM) proposing two new regulatory categories — Regulation CTX and Regulation CAM — designed to bring leveraged, margined, and financed retail crypto trading under federal oversight. The move came 20 days after the Digital Asset Market Clarity Act failed a Senate cloture vote 49-50 on September 15, falling 11 votes short of the 60 needed to proceed to debate.
The framework would create a voluntary federal licensing alternative to the state money-transmitter patchwork that currently governs most U.S. crypto exchanges. Within four days of the ANPRM's publication, Blockchain.com filed for both a designated contract market (DCM) license and a futures commission merchant (FCM) registration, joining 11 other companies that have sought DCM status in 2026 alone. The CFTC has approved six new DCMs this year and has 17 pending applications — one of its largest pipelines in recent history.
At stake is a $85.7 trillion annual crypto derivatives market in which approximately 97% of volume runs through unregulated offshore venues. The CFTC is attempting to pull a meaningful share of that flow onshore, using existing statutory authority rather than waiting for legislation that may not arrive before the 2026 midterm elections.
The Digital Asset Market Clarity Act reached its procedural endpoint on September 15, 2026, when every Senate Democrat voted against cloture. Two disputes killed it: disagreements over ethics rules governing officials' digital asset holdings, and whether stablecoin issuers should be permitted to offer yield or rewards to depositors. Community banks objected to the latter provision, arguing it would divert deposits.
The bill never reached floor debate. Its failure left the SEC and CFTC as the primary regulators by default, each acting under existing statutory authority. CFTC Chairman Michael Selig made the agency's position explicit in a Wall Street Journal op-ed published October 5: "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."
In a separate CNBC interview, Selig was blunter: "I'm absolutely disappointed in Congress." He described the rulemaking as "just the beginning" and said "it's go time" for the agency's crypto agenda.
Regulation CTX (Crypto Asset Transactions) addresses the threshold question: which retail crypto trades fall under CFTC authority?
The answer, per the ANPRM, is any transaction involving leverage, margin, or financing. The regulation classifies these transactions under Section 2(c)(2)(D) of the Commodity Exchange Act, the same provision the agency uses for retail forex. This is the CFTC's first formal rulemaking on this issue since it withdrew prior guidance in December 2025.
Key provisions under consideration include:
The regulation applies to margined and financed purchases — it does not extend to fully-paid spot trading. Retail customers using a CAM-registered platform would choose between fully-paid transactions and financed purchases, with the latter triggering CFTC oversight.
Regulation CAM (Crypto Asset Markets) proposes a new subcategory of CFTC-registered exchange purpose-built for crypto trading venues. Exchanges would have two options: register as a full Designated Contract Market under existing DCM rules, or register as a CAM, a tailored DCM sub-category with adapted core principles.
The CAM framework includes:
The framework is explicitly described as a "federal option" — comparable to the dual banking system in which firms choose between federal and state charters. Selig acknowledged the agency cannot mandate crypto trading on CFTC-registered platforms: "We don't have the authority to impose such a requirement without congressional action."
The ANPRM solicits comment on 60+ questions covering position limits, margin requirements, settlement procedures, blockchain-native compliance methods, and whether the integrated market structure common in crypto — where one entity acts as exchange, clearinghouse, and custodian simultaneously — should be preserved or separated.
The CFTC's framing leans heavily on the FTX collapse of November 2022. Chairman Selig stated: "Four years ago, Sam Bankman-Fried's FTX collapsed and stole more than $8 billion of customer funds. That cannot happen under our system."
The factual basis: FTX operated two CFTC-registered subsidiaries (LedgerX and FTX US Derivatives) where customer assets were properly segregated. Those entities did not lose customer funds. The unregistered, Bahamas-domiciled parent entity did. The contrast between the regulated and unregulated arms of the same company is the CFTC's central argument for extending its framework.
In his WSJ op-ed, Selig wrote that "America doesn't need to choose between responsible innovation and the protection all market participants need," and criticized the prior administration's "regulation-by-enforcement approach" as having driven firms offshore.
The CFTC's exchange licensing pipeline is the largest in years. Since 2024, the agency has granted 11 new DCM designations. In 2026 alone, six new DCMs have been approved and 17 applications remain pending.
Recent approved or filed entities include:
| Entity | License Type | Status | |--------|-------------|--------| | Blockchain.com | DCM + FCM | Filed Oct. 9, 2026 | | ProphetX | DCM | Approved June 2026 | | Ludlow Exchange | DCM | Approved 2026 | | Gemini Titan | DCM | Approved Dec. 2025 | | Xchange Alpha | DCM | Approved (fastest on record) |
Blockchain.com's filing is notable for several reasons. The company already offers prediction markets internationally through Polymarket and perpetual futures through Hyperliquid, but only to non-U.S. customers. DCM and FCM approvals would let it bring those products to U.S. retail. The company is also preparing an IPO targeting approximately $500 million, having filed a draft registration with the SEC in May. CFTC registration would strengthen its regulatory profile ahead of a public listing.
Prediction-market operators increasingly dominate the CFTC's exchange pipeline, a shift from the agency's historical focus on commodity and financial futures.
The economic rationale for the framework rests on the scale of crypto derivatives trading that occurs outside U.S. regulatory perimeters.
Global crypto derivatives hit $85.7 trillion in 2025, according to industry data aggregators. In early 2026, derivatives accounted for 73.2% of total crypto market volume. Approximately 97% of that volume flows through unregulated venues.
Quarterly derivatives volume at the three largest offshore platforms in Q1 2026:
| Exchange | Q1 2026 Derivatives Volume | |----------|---------------------------| | Binance | $4.90 trillion | | OKX | $2.19 trillion | | Bybit | $1.49 trillion |
By comparison, CME Group — the only major U.S. regulated venue for crypto derivatives — reported cryptocurrency average daily volume of 196,000 contracts with $7.3 billion in daily notional value during Q3 2026. While CME posted record overall Q3 volume of 29.4 million contracts (up 16% year-over-year), crypto derivatives remained below 2% of its total activity.
On-chain derivatives are also growing. Hyperliquid processed $633 billion in Q1 2026, capturing approximately 32% of on-chain perpetual futures volume. The CFTC's ANPRM specifically asks whether blockchain-native market structures — where settlement, custody, and trading happen on the same infrastructure — should be preserved under the new framework.
Several gaps remain:
Spot markets. Fully-paid, unleveraged crypto spot trading stays under state money-transmitter regulation. The CFTC explicitly lacks authority to bring spot markets under federal oversight without new legislation.
Securities classification. The framework does not resolve which tokens are securities. A joint CFTC-SEC interpretation clarified that bitcoin and ether are non-securities under CFTC jurisdiction, but the classification of thousands of other tokens remains contested.
DeFi protocols. While the developer safe harbor signals a permissive posture, the ANPRM does not directly address decentralized exchanges or autonomous market makers. Whether a smart contract deployer would need to register under Regulation CAM is left to the comment process.
Stablecoin regulation. The GENIUS Act, signed in June 2026, covers stablecoin issuance but stablecoin trading on leveraged platforms would fall under the CFTC's new framework.
Self-custody. Selig affirmed the agency's position: "We absolutely believe in the right to self-custody your assets and protect your own privacy in onchain transactions." How that principle interacts with FCM intermediation requirements and proof-of-reserves obligations is unresolved.
The 60-day comment period begins upon Federal Register publication. Final rules, if adopted, would follow a separate notice-and-comment cycle — placing implementation no earlier than mid-to-late 2027.
The CFTC's ANPRM represents the most concrete step toward a federal crypto exchange framework since the agency began supervising Bitcoin futures in 2017. It is not legislation. It cannot compel spot-market platforms to register. It does not resolve the SEC-CFTC jurisdictional boundary.
What it does is create a regulatory product — a federal license — that exchanges may find commercially attractive. Customer fund segregation is a selling point for institutional allocators. A CFTC-registered exchange is a more credible counterparty for banks and asset managers than a state-licensed money transmitter. And for companies preparing public listings, like Blockchain.com, federal registration reduces risk premiums.
The framework's ultimate impact depends on two variables: whether the comment process produces workable final rules, and whether Congress revisits market structure legislation before or after the 2026 midterms. The CFTC has placed its marker. Whether the market follows is a question for 2027.