The Commodity Futures Trading Commission is unveiling a pair of regulatory proposals on Monday to institute American digital asset oversight through its authority over margin-backed and leveraged transactions, seeking to address regulatory gaps left behind by Congress’s failure to enact comprehensive crypto legislation.
Agency representatives note that the U.S. derivatives regulator is pursuing two parallel pathways to form a comprehensive regulatory framework, with one directly managing orders and the second overseeing the operators running the infrastructure. The latter will create a fresh classification of platforms designated as crypto asset markets (CAMs).
Under these guidelines, cryptocurrency operations tied to financing, margin, or leverage will fall directly inside the CFTC’s jurisdiction. Consequently, traders utilizing borrowed capital to scale up their positions will be subject to this federal supervision.
CFTC Chairman Mike Selig stated in remarks prepared for presentation at Fordham Law’s annual Blockchain Regulatory Symposium that the agency is actively establishing definitive operational standards for crypto asset markets via its advanced notice of proposed rulemaking covering Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). He added that these measures establish a standardized framework for digital asset exchanges to function under unified federal oversight by the CFTC, utilizing the exact statutory authorities that the prior administration instead applied toward enforcement-led governance.
Nevertheless, this initiative may leave a major loophole intact due to the agency’s lack of jurisdiction over spot markets, which involve direct cryptocurrency exchanges where assets transfer ownership instantly at prevailing market rates without leverage or margin structures. This exemption encompasses unconditioned purchases and sales of the vast majority of digital tokens, such as bitcoin (BTC) and Ethereum’s ether (ETH), with one significant limitation: the CFTC retains authority to prosecute fraud and market manipulation within those sectors.
Aside from this, the regulator’s fresh measures cannot override or displace state money transmission statutes that currently govern direct trading activities, though agency officials noted that participants seeking access to sophisticated instruments will do so via specialized platforms supervised by the CFTC. Representatives mentioned that the true volume of the remaining spot market remains undetermined until feedback is gathered during the 60-day public comment window opened by these proposals, though they hinted that consumers might prefer conducting business within federally supervised environments.
Several prominent exchanges are already registered as designated contract markets (DCMs), including names like Coinbase, Crypto.com, Bitnomial, alongside prediction markets such as Polymarket and Kalshi. The proposed cryptocurrency subsegment will have a narrower scope than full DCM registration, though entities intending to offer swaps, options, and futures will still require the standard DCM authorization.
Resolving this spot-market loophole formed the core objective of the Digital Asset Market Clarity Act, which stalled in the U.S. Senate during the previous month. Following that legislative delay, the CFTC—alongside its primary peer, the Securities and Exchange Commission—has pressed forward with independent crypto initiatives to compensate for the absence of a dedicated market structure statute.
The SEC had previously outpaced the CFTC in drafting regulations, including a directive from late last week outlining guidelines for investment firms holding digital asset custody alongside an exemption facilitating security tokenization. With Monday’s announcements, the CFTC is catching up, and leadership hinted at additional measures forthcoming as Chairman Selig seeks to permanently codify earlier staff guidance surrounding digital assets.
Both regulatory bodies are currently directed exclusively by Republican commissioners, as President Donald Trump has yet to put forward nominees to fill the vacant seats on each five-member panel. At the SEC, leadership consists solely of Chairman Paul Atkins and Commissioner Mark Uyeda, while CFTC Chairman Mike Selig has served as the sole commissioner for nearly a year, permitting him to execute unilateral decisions typical of single-director bodies.
Earlier in the year, the two agencies collaborated to release a token taxonomy providing initial clarity on how they intend to classify assets falling under either SEC or CFTC oversight. While the SEC has focused on regulations governing assets under its purview, the CFTC is now stepping in to define guidelines for its respective side of the jurisdictional divide.
The newly proposed CFTC regulations are anchored within the retail-trading provisions of the Commodity Exchange Act established under the Dodd-Frank Act of 2010, a financial reform package designed to enhance consumer safeguards following the 2008 economic collapse.
The newly established CAM regulatory classification is designed as an optional framework for exchanges, mirroring tailored charter options found within the traditional banking sector. However, participating entities must adhere to compliance benchmarks already enforced for existing registrants, such as restrictions against listing assets prone to manipulation and mandatory proof-of-reserves protocols for platforms holding client funds within omnibus accounts.
Additionally, trading activity governed by Regulation CTX definitions will mandate the use of futures commission merchants (FCMs) as intermediaries, thereby integrating Bank Secrecy Act anti-money laundering controls according to the agency.
Furthermore, the commission’s “actual delivery” exemption will excuse transactions from oversight if they involve the genuine settlement of assets within a timeframe of less than 28 days.
During his address, Selig also noted that the agency is examining policies designed to protect software developers who build applications without soliciting trades, accepting orders, or maintaining custody of user funds. He emphasized that an individual should not be mandated to register as an introducing broker solely for publishing code.
Originally published at https://www.coindesk.com/policy/2026/10/05/u-s-cftc-joins-sec-in-proposing-crypto-regulations-though-spot-market-gap-lingers.
