Key facts
- The CFTC has published a plan to regulate crypto exchanges.
- The plan, Regulation CTX and CAM, seeks public input for 60 days.
- A federal license would allow exchanges to match buyers and sellers, hold customer assets, and settle trades.
- The proposed rules aim to prevent fraud by separating customer funds and requiring record-keeping.
- The CFTC is considering proof-of-reserves requirements and standards for listing tokens.
- The SEC approved six funds that triple daily moves of Bitcoin, Ether, gold, silver, oil, and gas.
The Commodity Futures Trading Commission (CFTC) has released a proposal for a federal licensing framework for cryptocurrency exchanges, aiming to establish a unified regulatory approach in the U.S. The plan, known as Regulation CTX and Regulation CAM, is currently an early-stage document open for public comment for 60 days once it is published in the Federal Register.
The CFTC's initiative seeks to replace the current patchwork of state-by-state licenses and rules designed for different markets. The proposed regulations would primarily cover trades involving borrowed money or where leverage is offered. The agency interprets a 2010 Dodd-Frank provision broadly, potentially including trades where an exchange mentions leverage and holds customer crypto on its own books.
A federal license would grant exchanges the ability to match buyers and sellers, hold customer funds and crypto, settle trades, and offer lending services, with separate approvals required for each activity. Trades would be facilitated through brokers already subject to anti-money-laundering rules, and only these brokers or their sponsoring banks could provide leverage. Customer protections would include segregation of customer and company funds, record-keeping, market manipulation surveillance, and loss planning.
The CFTC is also considering requirements for proof-of-reserves and standards for listing tokens susceptible to manipulation. The agency stated that the rules are designed to prevent fraud, citing the FTX case as an example, and disavowed its past approach of 'regulation by enforcement' against entities like Kraken and Uniswap.
Proponents believe a federal license will enable U.S. exchanges to offer leveraged products, such as perpetual futures, which are currently restricted. This could lead to easier onboarding for users and broader industry growth. The clarity provided by federal rules is also expected to encourage banks and brokers to engage more with the crypto space.
In other market news, crypto majors were mostly flat, with Bitcoin trading around $86.3k and Ether near $2,714. The SEC approved six leveraged funds for trading, and Stripe announced plans to expand its stablecoin card services internationally.