The main US derivatives regulator has started work on a rulebook for crypto platforms that let ordinary customers trade on borrowed money. On 5 October 2026 the Commodity Futures Trading Commission (CFTC) published an advance notice of proposed rulemaking and asked the public to comment on how those rules should look.
An advance notice is an early stage. It does not create any new obligation yet. It tells the market what the agency intends to do and asks for views before it writes a formal proposal, so the comments filed in the next two months are likely to shape what follows.
What the CFTC wants to regulate
The notice concerns retail commodity transactions in crypto assets under section 2(c)(2)(D) of the Commodity Exchange Act. In plain terms, these are trades offered to retail customers on a margined, leveraged or financed basis. The CFTC calls them CTXs. The law already says platforms offering such trades must register with the agency, but the CFTC has never written rules tailored to them.
The agency asks for comment on three broad areas. The first is how to prevent abusive practices in crypto markets and CTXs under one national set of rules. The second is how to give firms crypto-specific guidance on requirements and practices the industry already treats as good compliance, drawing on the CFTC's oversight of parts of the crypto market since 2014. The third is whether to create, through rulemaking, a new subcategory of designated contract market registration called a crypto asset market, built only for CTXs.
Chairman Michael S. Selig said in the release that the commission wants rules "designed to prevent, rather than only prosecute after the fact, fraudulent schemes such as FTX".
The three-rung ladder
Selig explained the thinking at length in a speech the same day at the Fordham Law Blockchain Regulatory Symposium in New York. He described the market as a ladder with three rungs.
On the first rung are ordinary spot crypto exchanges. They are covered by the CFTC's anti-fraud and anti-manipulation powers but are mainly regulated under US state money transmission laws. On the second rung are exchanges that also offer retail customers margined, leveraged or financed trading, which must register with the CFTC. The third rung covers exchanges offering perpetual contracts and other derivatives, which must also register.
The new rules are aimed at the second rung. A firm that only wants to offer CTXs could either register as a normal designated contract market or apply as a crypto asset market, which would still follow the statutory core principles but with a narrower set of rules written for these trades. Exchanges that offer futures, options or swaps would stay under the existing framework.
Selig compared the choice to banking, where a firm can pick a federal or a state charter. He also stressed a limit: only Congress can force every crypto exchange to register with the CFTC.
The 28-day delivery test
One technical point could matter a great deal for platforms. The law exempts these transactions from the on-exchange trading requirement if the asset is actually delivered within 28 days. Selig said the CFTC plans to propose that delivering a crypto asset to a user's own external, non-custodial wallet within 28 days would generally count as actual delivery.
He added that the agency is separately exploring a lasting policy for developers who publish software, but said that is outside the scope of this proposal.
How to comment
Comments must be in writing and must arrive within 60 days of the notice's publication in the Federal Register. The CFTC says comments will be posted publicly on regulations.gov, and the exact closing date will follow from the Federal Register publication date.
For readers outside the US, including in India, the rules would apply only to platforms serving US customers. Regulators elsewhere are on their own timetables, such as the UK's crypto authorisation window that opens on 28 February 2027. Leveraged crypto trading carries a high risk of loss, and the notice itself is about customer protection. This is information, not advice, and anyone approached with offers of guaranteed profits from such trading should treat it as a warning sign, as regulators said during World Investor Week.
