The agency's draft leans on existing authority after last month's setback for crypto market structure legislation. If finalized, retail leveraged, financed, or margin crypto trading would fall squarely under the CFTC's umbrella. In plain English, that is borrowing to chase bigger gains, while also taking on bigger potential losses.
The plan also sketches a fresh registration category for venues that offer these leveraged products. Venues aiming to list crypto perpetuals or crypto-linked prediction markets may instead choose the traditional path of registering as designated contract markets, the CFTC's general label for derivatives exchanges.
CFTC Chairman Michael Selig framed the move as a push for clarity and consumer safeguards. "The American people deserve clarity, certainty, and consumer protections in the crypto asset markets and the agency is committed to delivering this by incorporating crypto asset transactions into its uniform national market regulatory framework," he said. In a Monday speech at Fordham Law School, Selig pointed to the collapse of FTX as a cautionary tale about state licensing limits. "Although FTX had a US subsidiary with state money transmitter licenses, its customers' funds were nowhere to be found." By contrast, customer assets at CFTC-registered subsidiaries remained protected, a safeguard that did not extend to large portions of FTX's wider business.
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Some specialists view this as a mechanism for companies providing both cash markets and leveraged positions to shed state-by-state oversight once they come under the CFTC's purview. Some experts view this as a route for companies running both spot markets and leveraged margin services to transition from state-by-state regimes once they come under CFTC oversight. Aaron Brogan - who leads Brogan Law as its founding managing attorney - said the rule appears to be crafting a "textual case for state preemption of spot trading," aiming to build a relatively permissive federal framework for digital asset trading.
The new push follows a bipartisan move last month to block the so-called Clarity Act, which would have explicitly given the CFTC authority to regulate spot trading of digital assets treated as commodities. In the absence of legislation, senior officials at the CFTC and the Securities and Exchange Commission have pledged to move ahead on their own, while acknowledging that agency rules are easier for a future administration to unwind than a law. The Trump administration is hoping companies will adopt the rules they roll out, making it tougher to reverse them later. The proposals could also lock in a model first advanced during the second Trump administration, allowing the CFTC to supervise digital asset firms directly without awaiting congressional action.
Exchanges that choose to offer only spot activity, like trading Bitcoin or Ether without leverage, could continue to operate under state-by-state licensing.
Several major platforms already offer leveraged or financed crypto trading - among them Coinbase Global Inc. and Crypto.com. Robinhood Markets Inc. is preparing to offer perpetual futures on select cryptocurrencies, with leverage up to 10 times on some contracts.
Next comes the process: for 60 days, the CFTC will solicit public input on the measure. For everyday investors, the key question is where your platform decides to register and how that affects the guardrails around borrowing in crypto, and whether a single federal playbook starts to replace today's patchwork of state rules.
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