The Commodity Futures Trading Commission proposed the first federal rules written specifically for digital-asset trading on October 5, 2026, unveiling two draft regulations that would let registered exchanges offer retail customers crypto trades on margin, leverage or financing. The framework, Regulation CTX and Regulation CAM, marks a shift from years of enforcement-led policing toward purpose-built market rules.

CFTC Chairman Michael S. Selig said the drafts set requirements for CFTC-registered exchanges offering crypto assets such as bitcoin and ether for trading. Unlike the Clarity Act, which Congress failed to pass this month, the proposal would not force crypto assets to trade exclusively on CFTC-registered platforms. Selig said the agency lacks authority to impose that mandate without congressional action.

Instead, the rules create a voluntary, purpose-built option. Exchanges registering under the new framework could offer retail customers margined, leveraged or financed trading — products that state-licensed spot platforms cannot provide.

How would the registration system work?

Regulation CAM would establish a crypto-specific category inside the CFTC's existing designated contract market registration system, according to crypto.news. Exchanges already holding that status could adopt tailored rules to add CTX trading.

The initiative had already cleared an executive review stage: on September 17, the CFTC sent the framework — officially titled "Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets" — to the White House Office of Information and Regulatory Affairs.

What did the old approach get wrong?

Before this proposal, the CFTC and the SEC largely policed crypto through enforcement rather than rulemaking. Under the prior administration, both agencies pursued exchanges, custodians and software developers for alleged violations instead of writing rules reflecting how crypto markets actually worked. That approach pushed many firms offshore.

Domestic intermediaries operated largely through state money-transmitter licenses. Those laws accommodated crypto firms for over a decade, but they vary state to state and were built for payment-services providers, not financial markets. Federal rules demand tougher standards: deterring manipulation, ensuring transparent trading, managing conflicts of interest and safeguarding customer funds.

Why FTX shapes the custody argument

FTX illustrates the stakes. Its founders fraudulently diverted roughly $8 billion in customer funds to finance proprietary trading before the Bahamas-based exchange collapsed. The CFTC and SEC filed charges only after the firm had gone under.

FTX operated in the U.S. the way BlockFi and Voyager Digital did — through subsidiaries holding state money-transmitter licenses. Most of its offshore and state-regulated entities went bankrupt alongside the parent. The exception was its CFTC-registered subsidiary, where customer property stayed segregated and secure even as the rest of the business collapsed. Selig cited that contrast directly in his October 5 opinion article to argue for a federal registration option.

Where do bitcoin and ether sit now?

The proposal follows a joint CFTC-SEC interpretation issued earlier in 2026 clarifying that a range of crypto assets, including bitcoin and ether, are non-securities within the CFTC's regulatory authority.

Selig framed the rules as an attempt to avoid past mistakes. "America doesn't need to choose between responsible innovation and the protection all market participants need" from fraudulent and abusive practices, he wrote, adding that the country "needs prophylactic rules that reasonably ensure both." He also acknowledged the agency's limits, noting that rulemaking cannot substitute indefinitely for a statutory framework passed by Congress.

The proposal arrived after the Senate rejected cloture on a motion to proceed to the Clarity Act by a vote of 49 to 50, short of the 60 votes needed.

The advance notice of proposed rulemaking, built on Section 2(c)(2)(D) of the Commodity Exchange Act, asks the public how a national regime could prevent abusive trading practices and what crypto-specific information exchanges should disclose. Written comments are due within 60 days of publication in the Federal Register, and the CFTC will post submissions on Regulations.gov — the first concrete checkpoint in what could become the first federal crypto market-structure regime.