The Commodity Futures Trading Commission proposed a federal registration option for some cryptocurrency exchanges on Monday, while saying basic crypto spot platforms could remain under state oversight. The proposal comes after the Clarity Act failed to advance in the Senate last month, leaving the CFTC to spell out how existing commodities law could apply to digital-asset transactions.
The plan would create a new type of exchange that could register with the CFTC solely to trade crypto assets. It would cover retail crypto transactions conducted on a margined, leveraged or financed basis. The agency described the proposal as a way to explain how existing law applies, not as a requirement that every exchange register federally.
A Federal Option, Not a Mandate
CFTC Chair Michael Selig said in prepared remarks at Fordham Law School that the proposal would create “a federal option for crypto asset exchanges.” Firms wouldn’t all have to register with the commission, he said. Under his approach, exchanges could choose between state licenses and federal registrations based on the products and services they planned to offer.
Selig compared that choice to the banking regulatory system, where firms may pursue either a federal or state charter, each of which authorizes different permissible activities. “Crypto firms should be free to pursue state licenses or federal registrations based upon the products and services the firm intends to offer,” he said.
The proposed division of oversight would depend on the kind of crypto activity and the registration a firm sought. Platforms offering basic crypto spot transactions wouldn’t have to register with the CFTC, Selig said, and could remain under state regulatory oversight. The proposal doesn’t establish one federal registration requirement for every crypto exchange.
Selig also pointed to a limit on the commission’s authority. “Only Congress has the authority to mandate that all crypto asset exchanges register with the Commission,” he said. The proposal sets out a federal route under existing law, while a universal requirement would need congressional action, the chair said.
Congressional Stalemate and Agency Action
The proposal followed the Clarity Act’s failure to pass a Senate procedural vote last month. The bill would have created a regulatory framework for crypto markets and divided oversight between the CFTC and the Securities and Exchange Commission. Democrats and several Republicans voted against advancing it.
The CFTC’s announcement came after that legislative effort stalled. Instead of waiting for the proposed bill to become law, the agency says it will use its existing statutory authorities to develop rules for digital-asset transactions and markets. The announcement doesn’t make the proposed rules final; it lays out the agency’s plan to make rules.
Selig said he was disappointed that Congress hadn’t delivered the Clarity Act to the President. He also invoked President Trump’s pledge to establish a crypto-asset regulatory market structure with or without legislation. “We will help him deliver it using our existing statutory authorities,” Selig said.
The agency’s proposal leaves two questions distinct: which crypto activities could use a CFTC registration, and whether Congress will enact a broader framework assigning oversight between federal regulators. For now, the proposal offers federal registration for certain crypto-asset exchanges, while basic spot platforms may remain under state supervision.