The US Commodity Futures Trading Commission (CFTC) just proposed a framework for leveraged retail crypto trading. Scott Melker outlines the details in the video above.
The CFTC proposes new federal framework for leverage retail crypto trading. The agency floated a new crypto asset manage, excuse me, crypto asset market cam.
Cam Newton. Cam. Exchange category, but said it can't require crypto to trade on CFTC platforms without Congress. So this is where that push and pull of the clarity act comes in. When the clarity act failed, the SEC moved immediately, the Friday after we saw that the CFTC and their commission of one, Mr. Mike Celing, the commissioner, who's the only CFTC commissioner right now,
that he submitted some rulemaking proposals to the White House, but we did not know what they are. Presumably this is what they are. And the CFTC now is developing these rules for leverage, margin and finance retail crypto transactions. This is where they know they are allowed to make rules and they're going to do everything they can within the letter of the law
to bring crypto exchanges and other platforms into a compliant manner to make life easier for them here. Like I said, exchanges offering leverage products could register under a new federal category called a crypto asset market. So here's what the proposed framework contemplates. Crypto specific token listing standards, which we don't have, market surveillance and anti-manipulation rules, proof of reserves for customer for pooled customer assets.
Very, very important. In fact, Celing dropped a video on X that showed all of the FTX scandals and all the problems created by the lack of rules was pretty scathing. Capital requirements, segregation of customer assets, risk disclosures, KYC and anti-money laundering, which is AML, controls. So,
they're getting pretty deep here. Token reviews of what is allowed to be listed not to consider supply concentration, insider holdings, vesting schedules, programmatic issuance and buyback. And the CFTC apparently is also considering clarifying that delivery into a customer's external wallet within 28 days counts as actual delivery. So now we are very clearly in the comment phase here. This is where we now they propose the idea.
Uh people are allowed to give comments and discuss it. But the the main point here is that most of these products are offered offshore. Americans either use VPNs or an exchange that is not heavily regulated to participate in the activities. The CFTC is saying they want to bring that all into a very obvious, very rule-based regime in the United States where these exchanges can offer these products and the customers using them will know that they are protected by the CFTC.
We know that Congress could not finish this rule book. So the CFTC basically grabbed a cocktail napkin and started taking notes. We're going to do this ourselves.
