The Commodity Futures Trading Commission has published a plan to license crypto exchanges at the federal level, three weeks after the Clarity Act died in the Senate. The document is an early request for public input rather than a final rule, and stakeholders will have 60 days to comment once it hits the Federal Register.

The proposal lays out what Congress could not pass: a single federal license for crypto exchanges, replacing the current patchwork of rules built for other markets and state-by-state licenses. The framework rests on two instruments, Regulation CTX and Regulation CAM, with leverage determining who needs a license at all.

What trades would the CFTC cover?

The plan mainly targets trades involving borrowed money, or where borrowing is merely offered. The agency reads a 2010 Dodd-Frank provision broadly enough that even a fully paid trade could fall under its authority if an exchange mentions leverage in its terms and holds customer crypto on its own books.

A license would permit a defined set of activities:

• Matching buyers and sellers
• Holding customer money and crypto
• Settling trades
• Lending

One company could hold a license for several of these functions, with separate approvals for each. All trades would run through brokers already subject to anti-money-laundering rules, and only those brokers or their sponsoring banks could extend leverage to customers.

Customer protections in the framework include segregating customer funds from company assets, recordkeeping, manipulation monitoring, loan verification and loss planning. The CFTC is also weighing proof-of-reserves requirements and standards for screening out easily manipulated tokens from listings.

Who is behind the plan, and what does it disown?

Mike Selig, a former CFTC official who has championed the framework, said the rules are designed to prevent fraud like FTX rather than prosecute it afterward, and posted a promotional video to make the point. The notice also disowns the agency's own enforcement history, describing the Biden-era cases against Kraken, Ooki DAO and Uniswap as regulation by enforcement.

The market read is that a federal license gives US exchanges a path to offer leveraged products they currently cannot. Three moves underscore the demand: Robinhood announced US crypto perpetual futures, Coinbase filed for single-stock perps, and Kraken's parent company is negotiating with Hyperliquid. All three need a regulatory door of exactly this kind to operate onshore.

What is the tradeoff?

Clearer rules let US companies offer more, which is why traders view the proposal as the clearest path yet for perpetual futures on American soil. A federal license also carries real compliance costs, and some products will not survive them.

The framework could also unblock banks and brokers that have stayed away from crypto because answering "which regulator covers this" has been the blocker for years.

The 60-day comment window once the notice enters the Federal Register is the next concrete milestone. How the agency translates input into drafted rules, and whether it can act without new statutory authority from Congress, will determine whether a federal exchange license becomes operational reality or another stalled framework.