The Commodity Futures Trading Commission issued an advance notice of proposed rulemaking on October 5, 2026, seeking public comments on how it might regulate retail crypto asset transactions.
The Notice specifically targets crypto transactions offered on a leveraged, margined, or financed basis, referred to throughout the document as CTXs.
Beyond individual transactions, the Notice also contemplates a purpose-built regulatory environment for exchanges and intermediaries engaging in CTX activities, collectively described as crypto asset markets, or CAMs.
CFTC Chairman Michael Selig stated that the proposed regulations “wouldn’t require crypto assets to trade on CFTC-registered platforms,” signalling a non-mandatory initial approach.
The Notice is divided into three main parts, covering historical background, proposed Regulation CTX, and proposed Regulation CAM, each addressing distinct aspects of the potential framework.
The CFTC acknowledged that it has not yet adopted a comprehensive set of rules explaining how existing provisions of the Commodity Exchange Act apply to crypto assets.
According to the regulator, that uncertainty has left market participants unsure how to operate under federal rules and has contributed to reliance on state licensing regimes, offshore platforms, and reactive enforcement actions.
One significant threshold question concerns what constitutes “actual delivery” of a crypto asset, with the CFTC preliminarily viewing delivery as requiring a meaningful transfer of possession or control, not merely a book entry.
For crypto assets specifically, the Notice suggests that possession and control may depend on who holds the private keys needed to access a wallet or account.
The CFTC’s preliminary understanding is that transactions settled through on-chain protocols often result in actual delivery, because the asset is typically transferred directly to a purchaser’s wallet for storage.
The proposed Reg CAM framework would create a tailored subcategory of Designated Contract Market, a structure that already exists under the Commodity Exchange Act, adapted specifically for crypto asset trading.
The Notice proposes that a CAM-registered exchange would be subject to requirements covering listing standards, market surveillance, position limits, trading records, execution methods, and emergency powers.
The CFTC asks specifically how these requirements should account for features unique to crypto markets, including round-the-clock trading, blockchain outages or forks, and the use of smart contracts.
Under the proposed intermediary framework, CTXs would be handled by futures commission merchants subject to customer protection, disclosure, financial, and risk management obligations comparable to those applied in conventional futures markets.
The Notice also raises questions about insolvency risk, asking how customer crypto assets would be treated if an exchange, FCM, or custodian became insolvent, and whether proof of reserves practices should play a role.
The CFTC further seeks input on whether customer assets could be rehypothecated, meaning reused by an intermediary for its own purposes or to support other transactions.
Integrated business structures, in which a single corporate group combines exchange, custody, financing, and settlement functions, are identified as raising potential conflicts of interest that would need to be addressed through safeguards and disclosures.
As Chairman Selig stated in a concurrent opinion article, “Today’s action is only the beginning. The CFTC is starting the process of addressing gaps in crypto-asset market structure and creating clear rules of the road for innovators and market participants.”
The Notice is not a final rule and does not impose new requirements on market participants at this stage.
The deadline for submitting public comments in response to the Notice is December 14, 2026.