CFTC opens a 60-day comment period on a crypto rulebook built on its existing retail-commodity powers
Victoria Shinder1 min readThe US Commodity Futures Trading Commission published on 5 October an Advance Notice of Proposed Rulemaking (ANPRM) on what it calls a comprehensive framework for crypto asset transactions, and opened it for public comment.
The legal hook. The notice is built on section 2(c)(2)(D) of the Commodity Exchange Act, which governs certain leveraged retail commodity transactions; the CFTC calls the crypto ones "CTXs". Chairman Michael Selig said the process follows the President's directive to propose a federal crypto market structure using the agency's existing statutory authorities, rather than waiting for new legislation.
What it asks. The ANPRM seeks comment on how the CFTC can:
- prevent abusive practices in crypto markets and CTXs under a single national regime;
- give market participants crypto-specific guidance on compliance practices the agency regards as industry best practice, based on its oversight of parts of these markets since 2014;
- codify a new subcategory of designated contract market registration, a crypto asset market, purpose-built for CTXs.
What it is not. An ANPRM is the step before a proposed rule. The CFTC says it will use the comments to inform possible future action, such as a rulemaking.
Timing. Comments are due within 60 days of publication in the Federal Register and will be posted on Regulations.gov.
Selig framed the aim as rules designed to prevent, rather than only prosecute after the fact, schemes such as FTX. Exchanges and brokers who would fall under a "crypto asset market" category have the clearest interest in commenting now, because the shape of that registration is still open.