CFTC Seeks Comment on Proposed Federal Framework for Retail Crypto Transactions

On October 5, 2026, the U.S. Commodity Futures Trading Commission (CFTC or the Commission) issued an advance notice of proposed rulemaking (ANPRM)¹ outlining and requesting comment on a proposed federal regulatory framework for certain retail crypto asset transactions (CTXs).²

The ANPRM represents a significant regulatory initiative concerning retail crypto trading and customer protection. In the absence of new legislation addressing crypto market structure,³ the Commission is considering how its existing statutory authority could be applied to these transactions. The contemplated framework has two principal components:

• Regulation Crypto Asset Transactions (Regulation CTX), which would address the scope of crypto asset transactions subject to the CFTC’s existing authority, and
• Regulation Crypto Asset Markets (Regulation CAM), which contemplates a new subcategory of designated contract market (DCM) registration, known as a crypto asset market (CAM), for exchanges offering only CTXs.

The ANPRM is an initial step in the rulemaking process, through which the Commission is seeking public input before developing proposed regulatory text. It requests comment on the scope of covered transactions and the requirements applicable to exchanges and intermediaries facilitating them. Market participants may wish to consider the implications for their existing and planned business models and whether to submit comments. Comments are due December 14, 2026.

Key Takeaways

• The CFTC is considering a federal regulatory framework for crypto asset transactions based on its interpretation of its existing authority over certain retail commodity transactions. The ANPRM relies on the Commission’s interpretation of Section 2(c)(2)(D) of the Commodity Exchange Act (CEA), which subjects certain retail commodity transactions offered or entered into on a leveraged, margined, or financed basis to specified provisions of the CEA “as if” they were futures contracts unless a statutory exception applies.⁴
• The Commission interprets key terms to effectuate its jurisdiction over CTXs. The Commission addresses the meaning of the terms “offer,” “acting in concert,” and “actual delivery” and preliminarily interprets Section 2(c)(2)(D) to apply where leverage, margin, or financing is offered, including through standard account documentation, even if the customer declines it. The Commission also takes the view that an otherwise covered transaction remains subject to the CEA and CFTC’s exclusive jurisdiction until “actual delivery” occurs or another statutory exception applies, including where the customer has paid in full.
• Regulation CAM contemplates a tailored regulatory framework for exchanges offering CTXs. Under the ANPRM, exchanges offering only CTXs could elect CAM designation as a subcategory of DCM registration, subject to the statutory DCM Core Principles and tailored implementing regulations. DCMs could also offer CTXs without obtaining a separate CAM designation. The Commission also seeks comment on potential modifications to existing requirements governing futures commission merchant (FCM) intermediation, custody, financing, clearing, and customer protection, including to accommodate vertically integrated business models.
• The Commission contemplates an optional federal registration pathway alongside state-regulated spot markets. Under the contemplated framework, platforms could offer CTXs through federally regulated trading facilities, while platforms that do not offer CTXs could continue operating under applicable state regulatory regimes.⁵ The Commission preliminarily believes that federal regulation of CTXs would preempt conflicting state laws governing the operation of trading facilities offering those transactions, although the scope of any such preemption remains uncertain.
• The ANPRM is an initial step toward a potential regulatory framework. The Commission has not proposed specific regulatory text and is seeking public input on fundamental aspects of the framework, including the scope of covered transactions, the application of the actual delivery exception, and the regulatory requirements applicable to exchanges and intermediaries. The comments received will inform whether and how the Commission proceeds with proposed rules.

I. Background: Retail Commodity Transactions Under the CEA

The starting point for the contemplated framework is Section 2(c)(2)(D) of the CEA. That provision generally applies to commodity transactions offered to or entered into with retail customers, that is, persons who are neither “eligible contract participants”⁶ nor “eligible commercial entities,”⁷ on a leveraged, margined, or financed basis, unless a statutory exception applies. Among other exceptions, the provision excludes contracts of sale that result in actual delivery within 28 days.

Section 2(c)(2)(D) subjects covered retail commodity transactions to certain provisions of the CEA “as if” they were futures contracts. As a result, such transactions generally must be conducted on or subject to the rules of a CFTC-registered DCM and are subject to applicable antifraud and other requirements.⁸

A classic example of a transaction covered by Section 2(c)(2)(D) would be an offer to a retail participant to enter into a purchase of gold on a leveraged, margined, or financed basis where the gold is not fully deposited in a vault and the customer cannot take “actual delivery” of the gold until the margin account is fully paid.⁹

II. Regulation CTX: What Transactions Would Fall Within the Federal Framework?

Although crypto assets may be “commodities” under the CEA, their characteristics, including how they are created, their lifecycles, how they are traded, and how transactions involving them are settled, differ from those of traditional commodities such as metals and energy products. Regulation CTX acknowledges that and focuses on two questions central to determining whether retail crypto transactions fall within the scope of Section 2(c)(2)(D): (i) what constitutes an offer of leverage, margin, or financing, and (ii) when a transaction qualifies for the statutory actual delivery exception.

The Scope of an Offer of Leverage, Margin, or Financing

The Commission advances an interpretation of Section 2(c)(2)(D) under which the statutory phrase “even if not entered into” extends to offers of leverage, margin, or financing. Under this interpretation, a transaction could be covered even if the customer declines the offered financing and purchases the crypto asset on a fully paid basis.

The Commission also preliminarily believes that a covered offer could arise through standard account-opening documents, exchange terms and conditions, or credit and margin agreements, without a separate offer for each transaction. Accordingly, if an account permits customers to finance crypto purchases, even fully paid transactions through that account could remain subject to Section 2(c)(2)(D) while open unless a statutory exception applies.

The ANPRM also considers financing arrangements involving third parties acting in concert with an exchange or counterparty, including arrangements through which a platform facilitates access to financing. Thus, the scope of a covered offer may depend not only on financing provided directly by a platform but also on its relationships with third-party financing providers.

Although the ANPRM addresses what constitutes an offer of leverage, margin, or financing, it does not propose definitions of those underlying terms. Given the potentially broad consequences of a covered offer, the treatment of crypto-specific financing arrangements, including those involving third-party providers and onchain¹⁰ protocols, remains an important issue for comment.

Interpretation of the Actual Delivery Exception

The Commission’s preliminary interpretation of “actual delivery” focuses on whether the customer obtains meaningful possession and control of the purchased crypto asset.¹¹ Consistent with existing case law, including CFTC v. Monex Credit Co.,¹² the Commission believes that an internal credit on an exchange’s books would not, by itself, constitute actual delivery. The ANPRM also considers whether actual delivery requires customers to control the credentials necessary to access the asset, such as private keys, and exercise associated rights without intermediary restrictions.

The ANPRM seeks comment on the standards for possession and control, including whether exclusive control is necessary and whether actual delivery can occur notwithstanding an outstanding lien or security interest in the purchased assets.

The Commission also preliminarily interprets the actual delivery exception to apply only once delivery occurs. Under this interpretation, an otherwise covered crypto asset transaction (even a fully paid transaction) would remain subject to the CEA until actual delivery occurs or another statutory exception applies, including where delivery ultimately occurs within the statutory 28-day period.

The Commission preliminarily believes that transactions executed through onchain trading protocols typically result in actual delivery because assets are transferred directly to customers’ wallets. The ANPRM does not specifically address how this interpretation would apply to purchases facilitated by an introducing broker or FCM, including where an intermediary exercises control over the assets.

III. Regulation CAM: A Tailored Regulatory Framework for Crypto Markets

While Regulation CTX addresses which transactions fall within the CFTC’s authority, Regulation CAM considers how those transactions could be offered through federally regulated exchanges and intermediaries.

In his October 5 remarks, Chairman Selig described a three-rung framework for crypto exchanges, distinguishing ordinary spot trading; retail crypto transactions involving leverage, margin, or financing; and crypto derivatives trading.¹³ The ANPRM focuses on the second category, considering a potential federal regulatory pathway for exchanges offering only CTXs as a subcategory of a DCM.

Rung	Activities	Regulatory Framework	Federal Preemption
Rung 1	Ordinary spot crypto trading without covered offers of leverage, margin, or financing	Generally state-regulated; subject to CFTC’s existing antifraud and antimanipulation authority	None, generally under state money transmission laws
Rung 2	Retail crypto trading involving covered offers of leverage, margin, or financing (CTXs)	Federal DCM registration, or the contemplated specialized CAM designation (as a subcategory of a DCM)	CFTC’s exclusive jurisdiction asserted
Rung 3	Futures, perpetual futures, swaps, options and other crypto derivatives; may also offer CTXs	Existing DCM framework for derivatives (with specially tailored additional rules specifically for CTX)	CFTC’s exclusive jurisdiction asserted

Under the contemplated framework, CAMs would constitute a subcategory of DCM registration for exchanges listing only CTXs. CAMs would remain subject to the statutory DCM Core Principles, but the implementing requirements would be tailored to the characteristics of crypto markets. DCMs could also offer CTXs without obtaining a separate CAM designation but subject to implementation of CTX-specific rules.

The Commission also preliminarily believes that federal regulation of CTXs would preempt conflicting state laws governing the operation of trading facilities offering those transactions, potentially including certain state money transmission requirements.¹⁴ The scope of any such preemption remains uncertain and would depend on the applicable federal statutory framework and the particular state requirements at issue.

Trading and Market Oversight

Under the contemplated framework, CAMs would be subject to requirements addressing asset listings, market surveillance, trade reporting, execution, and operational resilience.

The Commission is considering crypto-specific listing standards addressing matters such as an asset’s supply, liquidity, governance, source code, and underlying blockchain network. It also seeks comment on the use of blockchain data for surveillance and reporting and how existing requirements should account for 24/7 trading, network congestion, blockchain forks, and other technological risks.

The ANPRM also seeks comment on the interaction between the contemplated CAM framework and the federal securities laws. Although a crypto asset may itself be a commodity rather than a security, transactions involving that asset may nevertheless constitute investment contracts subject to the federal securities laws. Under the SEC March 2026 interpretive framework,¹⁵ secondary market transactions involving a crypto asset may continue to constitute investment contracts depending on the nature and status of the representations or promises associated with the asset. The ANPRM raises questions about how CAMs would assess the securities-law status of transactions in listed crypto assets, including where circumstances change after listing or the SEC reaches a different conclusion regarding the application of the federal securities laws.

Customer Accounts, Custody, and Financing

The Commission is considering a framework under which FCMs would generally intermediate customer-facing CTX activity, with potential modifications to existing regulatory requirements. The ANPRM seeks comment on crypto custody, permitted depositories, customer asset segregation, capital, and risk management requirements, including intermediation and whether a limited-purpose FCM framework should be available for firms whose activities are limited to CTXs.

The Commission also contemplates financing through an FCM or a qualified banking institution sponsored by an FCM, subject to requirements addressing margin, collateral, financing charges, liquidations, and customer disclosures. The ANPRM seeks comment on other potential financing providers, crypto-specific practices such as continuous margining and automated liquidation, and whether existing restrictions on FCM lending and guarantees against loss under Regulations 1.30 and 1.56 would require modification.

Clearing, Customer Protection, and Vertically Integrated Structures

The ANPRM seeks comment on how clearing requirements should apply to CTXs and how customer assets would be treated in an FCM insolvency. In particular, the Commission asks whether CTXs intermediated by an FCM but not cleared through a derivatives clearing organization (DCO) would qualify for customer property protections under the Bankruptcy Code and CFTC Part 190 regulations, or whether arrangements under Article 8 of the Uniform Commercial Code could provide an appropriate alternative.¹⁶

The Commission also considers vertically integrated structures in which a CAM could register as an FCM or DCO or operate through affiliated entities performing those functions.¹⁷ The ANPRM seeks comment on how existing regulatory requirements and potential conflicts of interest should be addressed in such arrangements.

IV. Next Steps

The ANPRM seeks comment on several fundamental questions, including the scope of Section 2(c)(2)(D), the actual delivery exception, the contemplated CAM registration framework, and the treatment of intermediaries and vertically integrated structures.

Please contact us if you would like assistance evaluating the potential implications of the ANPRM or preparing a comment letter. Sidley will continue to monitor developments as the Commission considers whether and how to proceed with proposed rules.

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¹ Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets, 91 Fed. Reg. 64811 (Oct. 13, 2026) [hereinafter ANPRM], available at https://www.govinfo.gov/content/pkg/FR-2026-10-13/pdf/2026-20888.pdf.
² The ANPRM defines “crypto asset” as “any digital representation of value that is recorded on a cryptographically-secured distributed ledger.” It notes that any crypto asset, other than a “payment stablecoin” issued by a “permitted payment stablecoin issuer,” as such terms are defined in Section 2 of the Guiding and Establishing National Innovation for U.S. Stablecoins Act, Pub. L. No. 119-27, 139 Stat. 419 (2025) (GENIUS Act), could meet the definition of “commodity” under the CEA. See ANPRM at 64812 n.1.
³ Chairman Michael S. Selig has described the initiative as proceeding “[f]ollowing the Senate’s failure to advance the Clarity Act.” See Michael S. Selig, CFTC’s New Rules for Crypto, Wall St. J. (Oct. 5, 2026) (op-ed) [hereinafter Selig WSJ Op-Ed], available at https://www.cftc.gov/PressRoom/SpeechesTestimony/seligstatement100526.
⁴ Among other things, the CEA requires that “contracts for future delivery” must be traded on a CFTC-designated or -registered board of trade. See Section 4(a) of the CEA; see also Section 2(c)(2)(D)(iii) of the CEA (applying Sections 4(a), 4(b), and 4b to covered retail commodity transactions as if they were futures contracts).
⁵ In his Wall Street Journal op-ed, Chairman Selig noted that “Unlike the Clarity Act, these regulations wouldn’t require crypto assets to trade on CFTC-registered platforms. We don’t have the authority to impose such a requirement without congressional action. However, the rules would establish a purpose-fit option for crypto-asset exchanges that wish to operate under a single federal market-regulatory scheme. Unlike state-licensed exchanges, these exchanges would be permitted to allow retail customers to trade on a margined, leveraged or financed basis. Such platforms are distinct from ordinary spot-trading venues and are squarely within the CFTC’s regulatory jurisdiction.” Selig WSJ Op-Ed, supra note 3 (emphasis added).
⁶ See Section 1a(18) of the CEA.
⁷ See Section 1a(17) of the CEA.
⁸ Section 2(c)(2)(D) was enacted in 2010 as part of the Dodd-Frank Act to close the so-called “Zelener loophole” and extend the CFTC’s regulatory and antifraud jurisdiction to leveraged retail commodity transactions, including transactions involving metals and energy products. Section 2(c)(2)(C), which addresses retail foreign currency transactions, had been enacted in 2008 but was considered too narrow to encompass the broader range of retail commodity transactions addressed by Section 2(c)(2)(D).
⁹ See Retail Commodity Transactions Under Commodity Exchange Act, 78 Fed. Reg. 52426 (Aug. 23, 2013); see also CFTC v. Monex Credit Co., 931 F.3d 966, 974-75 (9th Cir. 2019); CFTC v. Hunter Wise Commodities, LLC, 749 F.3d 967, 979-80 (11th Cir. 2014) (discussing the actual delivery exception for leveraged retail precious metals transactions). 
¹⁰ As used in the ANPRM, “onchain” refers to transactions or data that are processed and recorded directly on a blockchain or similar system, and “offchain” refers to transactions or data that are processed and recorded outside of a blockchain or similar system. See ANPRM at 4 n.1.
¹¹ The Commission withdrew its 2020 interpretive guidance concerning actual delivery of virtual currencies in December 2025, citing developments in crypto asset markets and the need to reevaluate its prior interpretation. See Withdrawal of Interpretive Guidance: Retail Commodity Transactions Involving Certain Digital Assets, 90 Fed. Reg. 58149 (Dec. 16, 2025), available at https://www.govinfo.gov/content/pkg/FR-2025-12-16/pdf/2025-22872.pdf.
¹² CFTC v. Monex Credit Co., 931 F.3d 966, 974-75 (9th Cir. 2019).
¹³ Michael S. Selig, Chairman, CFTC, Remarks at the Fordham Law Blockchain Regulatory Symposium (Oct. 5, 2026), available at https://www.cftc.gov/PressRoom/SpeechesTestimony/opaselig12.
¹⁴ See ANPRM at 64824 n.199.
¹⁵ Application of the Federal Securities Laws to Certain Types of Crypto Assets and Certain Transactions Involving Crypto Assets, 91 Fed. Reg. 13714 (Mar. 23, 2026), available at https://www.sec.gov/rules-regulations/2026/03/s7-2026-09.
¹⁶ See ANPRM § V.F.2(v), at 99-100 (requesting comment on the treatment of CTXs as commodity contracts and the potential application of UCC Article 8 protections).
¹⁷ See also Conflicts and Affiliations, 91 Fed. Reg. 50926 (Aug. 6, 2026) (notice of proposed rulemaking), available at https://www.govinfo.gov/content/pkg/FR-2026-08-06/pdf/2026-15948.pdf.