The Commodity Futures Trading Commission (CFTC) has proposed a rule to require registration for crypto exchanges offering leveraged trades to retail customers. The proposal, unveiled Monday, would use the CFTC’s existing authority to regulate leveraged crypto transactions and establish a new registration category for such exchanges. CFTC Chairman Michael Selig stated the move aims to provide clarity, certainty, and consumer protections in crypto markets by integrating them into the agency’s uniform national market regulatory framework.
Leveraged, financed, or margin trading allows traders to borrow funds to amplify potential gains and losses. The CFTC will accept public comments on the proposal for 60 days. This initiative addresses a regulatory gap left after the bipartisan Clarity Act was blocked by senators, which would have granted the CFTC authority over commodity-based digital asset trades.
In the absence of legislation, the CFTC and SEC are advancing independent regulatory efforts, acknowledging that rules may be more easily reversed by future administrations than laws. The Trump administration hopes industry adoption will make rollbacks more difficult. Exchanges currently offering leveraged trading include Coinbase Global Inc. and Crypto.com, while Robinhood Markets Inc. is preparing to offer perpetual futures with up to 10x leverage on select cryptocurrencies.
Exchanges seeking to offer crypto perpetuals or prediction markets may still register as standard designated contract markets under the CFTC’s existing derivatives exchange framework.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing