CFTC proposes new rules for crypto industry

The Commodity Futures Trading Commission (CFTC) unveiled new proposals Monday for regulating cryptocurrency markets, after an effort to pass digital asset legislation through Congress came up short last month.

The agency, one of two main financial regulators expected to oversee the industry, gave notice of its plans to move forward with rulemaking on both crypto asset transactions and markets.

The new rules would lay out how existing commodities law applies to transactions involving digital assets, in addition to establishing a new type of exchange that can register with the CFTC solely for the trading of such assets.

The new exchanges, called crypto asset markets, would specifically handle retail crypto transactions that are traded on a margined, leveraged or financed basis.

CFTC Chair Michael Selig underscored Monday in prepared remarks at Fordham Law School that this creates a “federal option for crypto asset exchanges” but does not require all to register with the agency.

“Just like the banking regulatory system, where firms may choose to pursue either a federal or state charter, with each type of charter authorizing the firm to engage in differing types of permissible activities, crypto firms should be free to pursue state licenses or federal registrations based upon the products and services the firm intends to offer,” he said.

“Only Congress has the authority to mandate that all crypto asset exchanges register with the Commission,” he continued.

Platforms offering basic crypto spot transactions would not be required to register with the agency and can instead be overseen by state regulators, Selig noted.

The CFTC’s new proposed rulemaking comes just weeks after the Clarity Act fell short in the Senate . The bill aimed to create a regulatory framework for crypto markets, splitting oversight between the CFTC and the Securities and Exchange Commission.

The agencies have quickly moved to take up the issue themselves after the legislation failed to clear a procedural vote last month, with all Democrats and several Republicans voting against advancing the measure.

“I’m disappointed that Congress failed to deliver the Clarity Act to the President’s desk,” Selig said Monday, adding, “But 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.”