30 Pages, No Rule Text: What the CFTC's Crypto Notice Actually Asks

CFTC Chairman Michael Selig described the agency's first crypto market rules on October 5 as proposals named Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets, "Regulation CTX" and "Regulation CAM" for short. The document that carries them is something narrower. Published in the Federal Register on October 13 as 91 FR 64811, it is labeled an "advanced notice of proposed rulemaking" under RIN 3038-AF80, runs pages 64811 to 64840, and says the Commission is seeking comment on "its intent to develop and establish" rules. It contains no regulatory text. Comments are due December 14, 2026.

That makes it a question sheet, and the questions are the story, because they show what the agency has not decided about crypto markets. The headline claim is that the rules would not force spot crypto onto CFTC-registered exchanges, because, as Selig put it in his op-ed, unlike the CLARITY Act they would not require that. The notice agrees. Its reach is the part of the Commodity Exchange Act, section 2(c)(2)(D), that already covers retail commodity transactions done on a margined, leveraged or financed basis. Three of its questions go further than that framing suggests.

Does ownership mean holding the key?

Section 2(c)(2)(D) has an exit. A retail transaction that "results in actual delivery" within 28 days falls outside it. What counts as delivery for a token is the notice's central open problem. Citing the Ninth Circuit's 2019 Monex decision, which required the transfer of "some meaningful degree of possession or control," the Commission says it "preliminarily believes that possession and control of a crypto asset may require possession of the credentials (e.g., private key(s))" to the wallet holding it.

The notice then pushes past keys. Where a token carries governance rights or staking rewards, it says, possession and control "may require unfettered access to those rights." Its illustrations: delivery may require the capacity to vote "directly and on a disintermediated basis," or to stake "without being subject to fees charged by an intermediary." On that reading, a customer whose exchange holds the keys and skims a staking cut might not have received delivery at all, which would leave the trade inside the CFTC's net. These are preliminary views offered for comment, not findings.

The notice also treats on-chain trading differently. It says the Commission "preliminarily understands that many onchain trading protocols may settle transactions in a manner that results in actual delivery," since buyers usually receive the asset in their own wallets. It adds that under Monex a lien does not defeat delivery, and gives an example: a protocol that lets a margin-purchased asset circulate freely, subject to liquidation or burning if collateral falls below a threshold. It asks commenters whether that holds.

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Validator count as a risk input

The second question reads like it belongs in an engineering review. In the section on how a CAM, a crypto asset market registered as a new kind of designated contract market, should manage operational risk, the notice records that "market participants have observed that the operational resilience of a blockchain system may scale with the number, independence and diversity of the validators." It then asks: "Should the Commission consider validator/operator count, independence, and geographic and client diversity as relevant inputs into a CAM's operational risk assessment?" A related question asks how an exchange should handle governance and maintenance risks on chains it does not control, and what contingency and business-continuity measures to require.

The listing-standard questions point the same way. To judge whether a token is "readily susceptible to manipulation," the notice floats four factors: adequate freely transferable supply, details of "economic, operational, and governance control" of the underlying blockchain, whether its source code is open and public, and "the reliability, resilience, and security" of the chain, including events such as forks. None of this is a rule. But it is the first federal document this desk has found that asks whether client diversity and validator concentration belong in an exchange's compliance file.

Who is left holding the bag in a failure

The third cluster is bankruptcy. The notice asks whether non-cleared retail crypto trades routed through a futures commission merchant could get customer protection under the Bankruptcy Code's commodity broker subchapter and Part 190 of the CFTC's rules. "In the alternative," it asks, could "an arrangement built on the foundation of the bankruptcy protections provided under UCC Article 8" serve as "an adequate substitute"? It also asks whether platforms should have to tell customers how an insolvency would treat their assets, and whether existing limits on FCM lending and guarantees against loss, in regulations 1.30 and 1.56, need changes. The answers decide who stands in line after the next failed exchange, and the notice does not pretend to have them.

On federal and state law, the Commission is firmer. It "preliminarily believes" CTX regulation would preempt conflicting state law on trading facilities, and that state money transmission laws "generally defer" to a federal market structure for CFTC-registered entities. It says courts have handled preemption case by case, so the reach is uncertain.

What it is not

It is not a rule, and it will not bind anyone before it is followed by a proposed rule with text and a second comment round. It also does not create the spot-market regime that the Senate's CLARITY bill would have, after the Senate's cloture vote failed 49 to 50, as this desk reported from the official record. The notice says on its face that it covers the leveraged and financed retail segment the statute already assigns to the CFTC.