Lack of "Clarity" Leads to CFTC Rulemaking Efforts

After Congress’ failure to pass the Digital Asset Market Clarity Act, or the CLARITY Act, the Commodity Futures Trading Commission (CFTC) introduced an advanced notice of proposed rulemaking (the ANPRM).¹ The ANPRM seeks to facilitate secondary-market trading in crypto assets through two complementary frameworks for retail commodity transactions involving crypto assets (CTXs): Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM). The ANPRM is relevant both to firms considering a tailored CFTC registration pathway and to firms seeking clarity on remaining outside that framework, including through the actual delivery exception.

Since 2010, the Commodity Exchange Act (CEA) has authorized the CFTC to regulate—as if they were futures contracts—any agreement, contract, or transaction in a commodity that is: (i) “entered into with, or offered to (even if not entered into with)” a retail person (i.e., a person that does not qualify as an eligible contract participant or eligible commercial entity); and (ii) “entered into, or offered (even if not entered into)” on a margined or leveraged basis or that is financed by the counterparty or offeror or a person acting in concert with the counterparty or offeror,² unless actual delivery occurs within 28 days or a longer period as determined by the CFTC or another exception applies.³ 

The CFTC previously issued guidance on the actual delivery exception for retail commodity transactions involving crypto assets, but this guidance was withdrawn in December 2025. The ANPRM would not only describe when a transaction falls within the scope of the CFTC’s jurisdiction but also would provide a regulatory framework governing CTXs and exchanges and other market participants dealing in those transactions. According to the CFTC, existing rules are not “fit-for-purpose” for the novel characteristics of crypto assets and blockchain technology. The CFTC believes that its prior “regulation by enforcement” approach misallocated CFTC resources without providing transparency into who would be held accountable and for what. The ANPRM also gives the CFTC the opportunity to benefit from notice and comment, which would better inform a rulemaking. The CFTC also states that a federal framework would protect retail customers, even in extreme market conditions, unlike the state money transmission licensure regime. 

Regulation CTX

Under the ANPRM, the CFTC proposes a framework to explain when a transaction involving crypto assets falls within the scope of Section 2(c)(2)(D) of the CEA by (i) clarifying when an “offer” is made; and (ii) defining actual delivery in the context of crypto assets. 

First, Section 2(c)(2)(D) of the CEA currently applies to commodity transactions where a counterparty, offeror, or person acting in concert or a similar basis with the counterparty or offeror offers leverage, margin, or financing to a retail counterparty (i.e., a “covered offer”). The CFTC proposed to define the term “covered offer” to clarify the scope of Section 2(c)(2)(D) of the CEA. Under the ANPRM, a covered offer could be established by documentation between a retail customer and counterparty, offeror, or other person setting forth the terms pursuant to which the customer may execute the CTX, including across an account, exchange, or product class. Under the CFTC’s preliminary interpretation, a customer who declines offered financing and pays in full can still enter into a CTX. 

The CFTC explains when a person would be acting in concert or a similar basis with a counterparty or offeror. According to the CFTC, this language may encompass financing arrangements that involve the material assistance of the counterparty or offeror, such as arrangements that the counterparty or offeror facilitates, arranges, endorses, influences, or introduces, including where the arrangements are subject to revenue-sharing agreements with the counterparty or offeror or accessed through a financing platform operated by the counterparty or offeror. 

Second, Section 2(c)(2)(D) of the CEA applies to CTXs when actual delivery of the crypto asset does not occur and no other statutory exception applies. In the context of crypto assets, actual delivery would mean the “transfer of some meaningful degree of possession or control,” which may require possession of private keys or other credentials to a digital wallet address or account associated with the specific crypto asset. An internal book entry alone would not constitute actual delivery. Where governance rights or staking is involved, the CFTC preliminarily believes that actual delivery may require, depending on the crypto asset’s characteristics, unfettered access to those rights or entitlements. For example, this may include the capacity to participate in (i) governance directly and on a disintermediated basis; or (ii) staking without being subject to fees charged by an intermediary.

Regulation CAM

Before describing how a new regulatory framework would apply to crypto asset exchanges, the CFTC explains its understanding of the typical CTX structure and life cycle, and how exchanges offering CTXs may structure their corporate organization with CFTC registrants. The CFTC believes that futures commission merchant (FCM) intermediation should be required for all CTXs. An exchange that lists solely CTXs could register as a crypto asset market (CAM), a tailored subcategory of a designated contract market (DCM), designed to address the risks and commercial realities of CTXs. Under the contemplated subcategory of DCM registration, an exchange would be subject to tailored statutory DCM Core Principles referred to as the “CAM Core Principles” and could also register as an FCM. The CFTC’s clearing regime and regulations applicable to derivatives clearing organizations (DCOs) would similarly be modified under a DCO CTX regime where the crypto exchange also could be registered with the CFTC as a DCO. The contemplated framework would not require a CAM to combine exchange, FCM, and DCO registrations and responsibilities within a single entity. A stand-alone CAM could operate with separately registered FCMs and DCOs, whether affiliated or not. The CFTC also contemplates allowing traditional DCMs to offer CTXs under their existing registrations.

The CFTC further outlined the kinds of requirements a crypto exchange would be subject to if regulations are adopted under Regulation CAM. For example, a proposed rulemaking following the ANPRM may lead to a crypto exchange needing to enumerate each type of leverage arrangement it offers in its rulebook. In addition, under such a new rulemaking, Core Principle 3’s prohibition on listing contracts that are readily susceptible to manipulation would continue to apply to these exchanges. The CFTC is considering issuing guidance on this Core Principle in the specific context of CTXs that could include an exchange disclosure requirement focused on manipulation risk. 

The CFTC seeks comment on other aspects of existing Core Principles, including how to set appropriate position limits and accountability levels applicable to crypto assets and whether Regulation CAM should adopt operational risk and system safeguard requirements to address unique risks that may arise when crypto assets or blockchain technology is involved. The CFTC also seeks comment on crypto custody (including, among other things, whether conditions applicable to a crypto custodian should differ from those applicable to custodians in the futures market and whether Part 190 of the CFTC’s regulations would need to be revised to address the commercial realities of CTXs), the types of institutions that qualify as eligible leverage providers, margin and related requirements, intermediation of CTX orders and related FCM issues (including net capital, customer segregation, and risk management requirements), and clearing and settling CTXs, among other topics. The CFTC also seeks comment on whether and how customer assets associated with uncleared CTXs would receive protection under the commodity broker bankruptcy framework.

Next Steps

The CFTC asks a range of questions that suggests that it is open to considering the unique nature of crypto assets and blockchain technology before adopting Regulation CAM and Regulation CTX. For example, the CFTC asks how an FCM may use blockchain technology to accept customer orders and conduct its business and whether regulatory obligations would pose a hurdle for FCMs to incorporate blockchain technology in these manners. The ANPRM provides interested crypto exchanges and others engaged in spot crypto transactions who wish to provide leverage or financing the opportunity to comment on all aspects of the ANPRM. Comments are due on or before 14 December 2026.