The US Commodity Futures Trading Commission (CFTC) has proposed a new regulatory framework for crypto exchanges that offer leveraged or margined digital asset trading to retail investors.
The proposal follows the stalling of Congressional efforts to pass the "Clarity Act," leaving the US crypto industry facing continued regulatory uncertainty.
CFTC Introduces New Crypto Exchange Category
Under the proposal, the CFTC aims to create a new category known as a "crypto asset market" for platforms offering leveraged trading.
Exchanges opting to register under this federal framework would be required to comply with conditions such as safeguards against market manipulation and proof-of-reserves requirements. Customer transactions would also need to be routed through registered futures firms.
The CFTC has not yet set specific limits on leverage amounts; however, products offering leveraged trading would be subject to prior review by CFTC staff.
Move Follows Stalled Clarity Act
This proposal is viewed as an effort by the CFTC to provide a federal regulatory pathway for the crypto industry after Congress failed to reach an agreement on more comprehensive legislation.
CFTC Chairman Michael Selig stated that the framework aims to provide certainty, clarity, and consumer protection within the digital asset market.
However, the proposal is not yet a final rule.
The CFTC is currently inviting public comment before considering further regulatory action.
