The CFTC asked the public on October 5 to comment on two planned crypto rules, Regulation CTX and Regulation CAM, that would let exchanges offer leveraged retail trading under federal oversight. The notice came 20 days after the Senate voted 49-50 on the Clarity Act, 11 votes short of the 60 needed.
The document is an advance notice of proposed rulemaking, the step before a formal proposal. Headlines on October 5 called it a proposal, but the CFTC's own title says advance notice: it sets out what the agency intends to write and asks questions, without final rule text. The 60-day comment period starts when the notice appears in the Federal Register, and the register's CFTC listing showed no such entry when we checked on October 7.
What the notice would do
The rules rest on section 2(c)(2)(D) of the Commodity Exchange Act. It covers commodity trades with ordinary customers on a leveraged, margined or financed basis, and since the 2010 Dodd-Frank Act it has made it unlawful to offer them outside a designated contract market, the CFTC's category of regulated exchange. The notice says the agency never wrote rules for how that applies to crypto, so retail customers have relied mainly on state protections such as money transmission licensing.
Regulation CAM would add a new category, a crypto asset market. In the CFTC's sketch, a futures broker would handle each customer order and a clearinghouse would settle it, and leverage would come from a bank the broker sponsors. The notice leaves margin open, asking whether the clearinghouse or the CFTC should set the levels, and it asks for comment on proof of reserves audits of customer funds.
Onchain trading is treated separately. The CFTC's preliminary view is that a trade executed through an onchain protocol typically ends in actual delivery of the asset, which is one way a trade falls outside the section.
| Coverage on October 5 | The CFTC document | |
|---|---|---|
| Type | CoinDesk: the CFTC is "proposing" rules | Advance notice of proposed rulemaking, RIN 3038-AF80 |
| Comment clock | 60 days | 60 days from Federal Register publication (none found by October 7) |
| Spot trading | A gap that lingers | Not covered |
Buying and selling without leverage is not covered. CoinDesk reported that the CFTC can police fraud and manipulation in spot markets but cannot write national rules for them, so state licensing continues. Chairman Michael Selig said the agency cannot require crypto trading to move onto federal platforms without Congress.
The agencies fill the gap Congress left
The Senate vote on September 15 needed 60 votes to advance the Clarity Act and got 49, with 50 against, The Block and Decrypt both reported. Democrats opposed the bill over ethics rules covering the president's crypto wealth. Our August 7 report said the bill would be queued first when the Senate returned on September 14. It reached a vote the next day and failed.
$5 million and $75 million exemptions; comments due Oct 20.
The bill needed 60 votes to advance.
Sent for review before publication.
Advisers and funds; comments due Dec 7.
Regulation CTX and CAM; 60 days from publication.
The agencies moved on their own tracks. The SEC proposed Regulation Crypto Assets on August 18, four days after the canceled meeting covered in our August 15 report. On October 1 it proposed custody rules for investment advisers and funds that allow self-custody in some cases and state trust companies as custodians. The Federal Register published that proposal on October 6.
Agency rules carry a limit that statute does not. Rep. French Hill, who chairs the House Financial Services Committee, said on October 7 that the steps "fall short" of what is needed, Decrypt reported. He argued that exemptions and guidance can be undone by courts or a later administration, and he hoped the Clarity Act could pass in the lame-duck session after the November elections.
The Block reported in September that Republican aides saw the bill as effectively dead before those elections. Both views are on record, and no vote is scheduled in anything we read. In our reading, the CFTC notice binds no one yet: it creates no obligations until a formal proposal and a final rule follow, and we found a date for neither.
What to watch
Three dated items and one open window decide what comes next. Comments on the SEC's Regulation Crypto Assets close on October 20, and comments on its custody proposal close on December 7. The CFTC's 60-day clock starts when its notice appears in the Federal Register. Hill named the lame-duck session as the window for a Clarity vote.
