On October 5, 2026, the US Commodity Futures Trading Commission (CFTC) published a notice asking the public how it should write rules for a particular slice of crypto trading: retail purchases that are leveraged, margined or financed. This article explains what the notice is, what it does and does not change, and which questions remain open.
What did the CFTC actually publish?
The document is an advance notice of proposed rulemaking, usually shortened to ANPRM. It is an early step in US rulemaking: an agency says what it is thinking about and invites comment before it drafts any actual rule text. Nothing in it is binding on exchanges or customers.
According to the CFTC’s press release (number 9307-26, dated October 5, 2026), the notice states the agency’s intent to establish a framework of “fit-for-purpose rules” under section 2(c)(2)(D) of the Commodity Exchange Act, the federal law that governs commodity and derivatives markets. The release refers to the transactions in question as “CTXs”, short for crypto asset retail commodity transactions, and cites the notice as 91 FR 64811 in the Federal Register, the government’s daily journal of rules and notices. Comments must be in writing and received within 60 days of Federal Register publication, and the agency says they will be posted on Regulations.gov.
The proposed names for the eventual rule sets are Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets.
What is a retail commodity transaction?
The legal hook is older than crypto. Section 2(c)(2)(D) covers retail commodity transactions: deals with a person who is neither an “eligible contract participant” (broadly, a larger or more sophisticated financial party) nor an “eligible commercial entity”, where the deal is leveraged, margined, or financed by the seller, the counterparty or someone acting with them.
According to the CFTC’s 2020 interpretive guidance, published in the Federal Register on June 24, 2020, such transactions are treated as if they were futures contracts for purposes of certain parts of the law, unless “actual delivery” of the commodity occurs within 28 days. Futures contracts generally have to be traded on a registered exchange, so the rule matters: an offering that falls into this category without delivery can run afoul of those requirements.
Leverage is the key word. A plain purchase of a crypto asset with your own cash, delivered to you, is not what this section targets.
A worked example of leverage
Illustrative arithmetic: suppose a customer puts up $1,000 and the platform finances another $4,000, creating a $5,000 position. That is 5 times leverage ($1,000 plus $4,000 equals $5,000). If the asset’s price falls 1%, the position loses $50, which is 5% of the customer’s $1,000. Losses are magnified in the same proportion as gains, which is why regulators treat financed retail trading differently from ordinary purchases.
What does “actual delivery” mean, and why 28 days?
Under the 2020 guidance, actual delivery occurs when the customer obtains “possession and control of the entire quantity of the commodity” and can use all of it freely in commerce no later than 28 days after the transaction, and at all times afterward. The CFTC said cash settlement or offsetting arrangements did not qualify, and that mere book entries do not count. In its example, delivery had not occurred if the full amount was not moved away from a ledger or account run by or affiliated with the seller and received by a separate, independent depository or blockchain address.
The guidance also said that an ongoing lien on the purchased asset beyond 28 days generally prevents actual delivery.
For a trade made on November 3, the 28th day after the transaction falls on December 1 (27 more days take you to November 30, and one more reaches December 1). The calendar example is illustrative only; the precise counting rules are in the CFTC’s documents.
Why is the old guidance being replaced?
On December 11, 2025, then Acting Chairman Caroline Pham announced that the CFTC was withdrawing its guidance on actual delivery of “virtual currencies”. The agency described the guidance as outdated because crypto markets had changed significantly, and said it would consider whether updated guidance or FAQs were needed, seeking public feedback through its “Crypto Sprint”.
Withdrawal left a gap, since the underlying statute did not change. The new notice is the agency’s path to filling that gap through rulemaking rather than guidance.
How would the CFTC organize crypto exchanges?
In remarks at the Fordham Law Blockchain Regulatory Symposium in New York on October 5, 2026, CFTC Chairman Michael Selig described a three-tier picture that he called “rungs”. The table summarizes his description; it reflects the chairman’s framing, not a legal classification.
| Tier | Who it describes | Current federal treatment, per the chairman |
|---|---|---|
| Rung 1 | Ordinary spot crypto exchanges | CFTC anti-fraud and anti-manipulation authority applies; otherwise generally regulated under state money transmission laws |
| Rung 2 | Exchanges offering retail margined, leveraged or financed crypto trading | Congress requires registration with the CFTC; the agency has used this authority mainly for enforcement |
| Rung 3 | Exchanges already registered as designated contract markets (DCMs) | Could offer CTX trading under tailored rules |
A DCM is an exchange registered with the CFTC to list futures and similar products. Under the ideas described, firms that offer only CTXs could register as an ordinary DCM or as a new subcategory called a “crypto asset market.” Exchanges offering futures, options or swaps would remain under the current DCM framework.
What would the non-custodial wallet idea change?
Mr. Selig said he proposes codifying an interpretation under which delivering a crypto asset to a user’s external, non-custodial wallet within 28 days generally satisfies the actual delivery exception. A non-custodial wallet is one where the user, not a company, controls the private keys that authorize transfers.
The logic echoes the 2020 test: if the customer truly holds the asset outside the seller’s control, the transaction looks less like a financed bet and more like a purchase. What remains unclear is how the rules would treat edge cases the 2020 guidance dealt with in detail, such as lending arrangements, liens or affiliated custodians. The notice asks for comment; it does not answer those questions.
What is the CFTC asking the public?
According to the release, the notice seeks comment on three things, among other topics:
- how the agency can prevent abusive practices in crypto markets and CTXs under a uniform national regime;
- how it can give participants crypto-specific context about requirements and practices that are commonly accepted in the industry and that, based on the CFTC’s oversight of crypto markets since 2014, represent best practices for compliance; and
- how to codify, through rulemaking, a DCM subcategory known as a “crypto asset market” built specifically for CTXs.
The chairman said in the release that the goal is to “ensure America remains the crypto capital of the world” and that “the American people deserve clarity, certainty, and consumer protections in the crypto asset markets.” He also said the agency wants rules designed to “prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX.” These are statements of the agency’s aims, not findings about outcomes.
Related CFTC and market developments
The notice is one of several recent items. On September 24, 2026, CFTC staff updated FAQs covering customer funds invested in tokenized forms of permitted investments and the use of blockchain technology to meet a registrant’s recordkeeping requirements. The FAQs, first released on March 20, 2026, build on Staff Letter 25-39 on tokenized collateral and Staff Letter 26-05 on digital assets accepted as margin collateral. For background on the tokenization idea, see our explainer on tokenized assets.
Stablecoins sit on a separate regulatory track; our guide to what backs stablecoins and what can go wrong covers the basics. Other jurisdictions are taking different approaches to digital money, as in the digital euro pilot.
What is still unknown?
Several points are unsettled:
- Rule text. An ANPRM contains questions, not rules. A proposed rule, further comment and a final rule would follow before anything binds the industry, and the agency has not given a timetable in the materials reviewed.
- Scope. By the chairman’s own account, only Congress could require all crypto exchanges to register; the CFTC’s federal registration would be an option for exchanges rather than a universal requirement.
- Consumer outcomes. Whether the framework improves protection for retail customers depends on the final design, supervision and enforcement, none of which can be judged yet.
- Interaction with other regulators. The notice concerns CFTC authority under one section of one statute; it does not describe how it would fit with the work of other US agencies or state regulators.
Reading the notice without over-reading it
The main point for readers is modest but real. The CFTC has begun a formal process to write purpose-built rules for leveraged retail crypto trading, with the 28-day delivery test and a possible “crypto asset market” registration category at the center. It has not yet decided what those rules will say, and the detail of delivery, custody and leverage will matter more than the headline.
This article is general information, not financial, investment, tax or legal advice.
Sources: Commodity Futures Trading Commission
