CFTC Chair Mike Selig announced plans to implement stricter federal regulations for the cryptocurrency sector. The regulator aims to prevent future market failures similar to the 2022 collapse of FTX, which resulted in the loss of over $8 billion in customer funds.
The agency is currently seeking public comment on a proposed framework to establish a new federal registration category titled crypto asset market. This classification would specifically target exchanges that provide retail customers with leveraged, margined, or financed trading options.
Under the proposed rules, exchanges offering leverage would be required to register with the CFTC. The agency interprets the term leverage broadly, potentially bringing even fully paid trades under federal oversight unless customers take direct delivery of their digital assets.
Exchanges that do not offer leverage may continue to operate under existing state-level licensing regimes. Selig noted that the CFTC is leveraging its current regulatory authority to prepare for the transition of financial markets toward 24-7 on-chain operations.
