CFTC Chairman pushes for crypto regulations as agency seeks public comments on proposed rules

• CFTC Chairman Michael Selig says the agency will establish a federal crypto regulatory pathway using existing statutory authority despite stalled legislation.
• The agency proposed separate rules for leveraged crypto trading and crypto markets.
• Selig's comments come as the Senate failed to pass the Clarity Act in September, leaving the SEC and CFTC to explore rulemaking for crypto markets.

Commodity Futures Trading Commission (CFTC) Chairman Michael Selig said the agency will move ahead with crypto market regulations after Congress failed to advance legislation that would have established a broader framework for digital assets.

Selig says CFTC set to establish regulatory pathway for crypto market

Speaking Monday at the Fordham Law Blockchain Regulatory Symposium in New York, Selig said he was disappointed that Congress failed to deliver the Clarity Act. However, he argued that the CFTC can still establish a federal regulatory pathway for parts of the crypto market without waiting for new legislation.

“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,” stated Selig.

He noted that the CFTC's approach will create a federal option for crypto exchanges rather than force all platforms to register federally. Exchanges can pursue state licenses or federal registration depending on the products and services they offer.

Against that backdrop, the CFTC on Monday published an Advanced Notice of Proposed Rulemaking (ANPRM) seeking public comment on Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM).

Under the proposal, the CFTC is considering rules to prevent abusive practices in crypto markets and give market participants clearer guidance on regulatory requirements and industry practices.

The chairman described the proposed regulatory structure as a three-tier system. Ordinary spot exchanges would remain primarily subject to state money transmission laws, while exchanges offering leveraged or financed crypto trading would fall under CFTC oversight. Platforms offering perpetual contracts and other derivatives would also remain within the agency's jurisdiction.

Selig also pointed to FTX's collapse as evidence of the need for preventive regulation. He argued that regulators should establish rules designed to prevent fraudulent and abusive practices rather than primarily pursuing enforcement after misconduct has already occurred.

“The lesson from FTX’s failure should have been obvious. America shouldn’t have to choose between responsible innovation in crypto and protecting market participants from fraud and abuse,” Selig wrote in an X post on Monday.

The move follows the Senate's failure to advance the Clarity Act in September, stalling a legislative effort that seeks to define the regulatory responsibilities of the CFTC and Securities and Exchange Commission (SEC) regarding digital assets.

Selig stressed that the proposal does not give the CFTC authority to require all crypto assets to trade on federally registered platforms. He said that authority would require congressional action.

The agency has opened a 60-day public comment period.