At a glance
- The Commodity Futures Trading Commission published an advance notice of proposed rulemaking on retail crypto-asset transactions, which it calls CTXs, on 5 Oct.
- Comments are due within 60 days of the notice’s publication in the Federal Register, and the agency has not yet proposed a final rule.
The Commodity Futures Trading Commission said on Monday it is seeking public comment on a regulatory framework for retail commodity transactions in crypto assets under section 2(c)(2)(D) of the Commodity Exchange Act, the provision that covers leveraged or financed commodity sales to retail customers.
An advance notice of proposed rulemaking is a request for ideas before an agency drafts a rule. It is not the rule itself, and nothing in Monday’s notice changes what a platform may offer today.
The notice asks how the Commission could prevent abusive practices in crypto-asset markets and in CTXs under a single national regime. It also asks what industry practices the agency should treat as accepted ways of meeting existing requirements, drawing on its oversight of parts of these markets since 2014.
A third question is structural. The CFTC wants views on writing into its rules a subcategory of designated contract market, which it calls a “crypto asset market”, built specifically for retail crypto transactions rather than for the futures and options a conventional exchange lists.
“The American people deserve clarity, certainty, and consumer protections in the crypto asset markets,” Chairman Michael S. Selig said in the release. He said the Commission would use its existing statutory authorities, pointing to a presidential directive to propose a federal crypto-asset market structure, and cited FTX as the kind of fraud the rules should be designed to prevent rather than prosecute afterwards.
The Commission said it intends to use the comments to inform possible future action, including a rulemaking, on section 2(c)(2)(D) and on CTXs. Comments must be in writing and will be posted on Regulations.gov.
The notice lands in a busy month for US crypto rulemaking. The SEC has its own comment window open in parallel: see the SEC’s adviser custody proposal.
What happens next for CFTC retail crypto transactions
The 60-day clock starts when the notice appears in the Federal Register, not on the date of the press release. A proposed rule, if the Commission writes one, would come after that and would need its own comment period.
This article is for information only and is not investment advice.