The Commodity Futures Trading Commission is moving to establish a federal crypto regulatory market structure following the Senate’s failure to advance the Digital Asset Market Clarity Act. As federal lawmakers debate digital asset legislation, the CFTC is advancing rule-making efforts alongside the Securities and Exchange Commission.
CFTC Proposes Regulation CTX and Regulation CAM in Washington
In a move to shape federal oversight, the CFTC published an advance notice of proposed rulemaking covering Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). The rules target borrowed-money crypto trading platforms and aim to establish a purpose-fit option for exchanges wanting to operate under a single federal market-regulatory scheme. Unlike state-licensed spot exchanges, these CFTC-registered platforms would permit individual investors to trade on a margined, borrowed-money, or financed basis. The action follows a joint interpretation issued earlier this year by the CFTC and SEC clarifying that a broad swath of crypto assets, including bitcoin and ether, fall under the CFTC’s regulatory authority as non-securities.
Chairman Selig Defends Commodity Exchange Act at Fordham Symposium
CFTC Chairman Michael S. Selig argued that the Commodity Exchange Act already provides a workable foundation for digital assets. Speaking at the Fordham Law Blockchain Regulatory Symposium in New York on October 5, 2026, Selig stated that the statutory definition of a commodity is broad enough to cover Bitcoin and other digital assets. Selig invoked the “Lindy effect”—the concept that the longer something survives, the longer it is likely to keep surviving—to highlight Bitcoin’s durability since its 2014 commodity classification by the agency.
Did you know? Bitcoin was first classified as a commodity back in 2014, a designation that paved the way for regulated Bitcoin futures trading under CFTC supervision years before recent market expansions.
FTX Collapse Highlights Federal Versus State Regulatory Divides
The CFTC cited the bankrupt FTX exchange to illustrate vulnerabilities in the existing regulatory patchwork. FTX and other platforms like BlockFi and Voyager Digital operated in the U.S. mostly through state-level money transfer licenses. The CFTC noted that while state licenses are intended for payment-services providers rather than financial markets, customer assets held specifically within FTX’s CFTC-registered subsidiary remained segregated and secure during the firm’s collapse. FTX founders misused approximately $8 billion in customer funds through offshore and state-regulated entities before the agencies intervened.
SEC Issues FAQs on Federal Securities Laws for Digital Assets
While the CFTC advances its new rulebooks, the Securities and Exchange Commission continues to issue guidance clarifying digital asset classifications. Staff of the SEC’s Division of Corporation Finance issued frequently asked questions on September 25, 2026, to help market participants apply the commission’s March 17, 2026, Interpretive Release. The FAQs establish that definitions of “functional” and “decentralized” determine whether a crypto asset is a security under the Howey test. Once a crypto system becomes functional, ongoing efforts to maintain or improve the network are not considered essential managerial efforts that would classify the token as an investment contract.
Regulatory Challenges and Unilateral Actions by Single Commissioners
Both the SEC and CFTC are currently led exclusively by Republican commissioners as President Donald Trump has yet to nominate candidates to fill open seats on the five-member panels. At the SEC, leadership consists of Chairman Paul Atkins and Commissioner Mark Uyeda, while Chairman Selig has operated as the sole commissioner at the CFTC for nearly a year. This configuration has allowed agencies to take unilateral actions akin to agencies established with a single director. Meanwhile, major trading platforms including Coinbase, Crypto.com, Bitnomial, and prediction markets Kalshi and Polymarket maintain designated contract market status, while others evaluate the new CFTC registration category as the public comment period opens.
Frequently Asked Questions on CFTC Crypto Rules
What specific regulations did the CFTC propose in October 2026?
The CFTC published an advance notice of proposed rulemaking for Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). These rulebooks are aimed at establishing oversight for borrowed-money and margined crypto trading platforms.
Why did the Senate failure of the Clarity Act prompt agency action?
Following the Senate’s narrow 49-50 cloture vote against advancing the Digital Asset Market Clarity Act last month, the CFTC and SEC turned to their existing statutory authority under federal law to build a regulatory framework without waiting for new congressional legislation.
How does the new CFTC approach differ from former Chairman Gary Genslers strategy?
Unlike former SEC Chairman Gary Gensler’s “come and register” calls that required companies to treat crypto assets as securities under outdated regulations, the CFTC is creating a purpose-fit option that recognizes the distinctions between crypto assets and other commodities.
What happened to FTX customer funds held in CFTC-registered subsidiaries?
Despite the bankruptcy of FTX’s offshore entities and state-regulated subsidiaries—which misused roughly $8 billion in customer funds—customer assets held within FTX’s CFTC-registered subsidiary remained segregated and secure.