CFTC proposes federal rules for leveraged crypto trades

Trading crypto with borrowed money sits in a legal gray area in the US today. On Monday, the CFTC proposed changing that. The agency unveiled two new rules, Regulation CTX and Regulation CAM. Together, the two rules create a federal path for exchanges to register. Once registered, they could offer leveraged and margined trades to everyday customers.

CFTC chairman Michael Selig is moving now because Congress hasn't passed the CLARITY Act. That's the bill meant to settle who actually regulates crypto markets. He's using power the agency already has instead of waiting on lawmakers. Right now, Americans chasing leveraged crypto trades often go to offshore exchanges that skip US oversight entirely. A federal registration path could pull some of that activity back onto regulated ground. Nothing here is law yet, though. Exchanges can't register under these rules until the proposal survives public comment and gets finalized.

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Will offshore exchanges actually move their leveraged trading onto this new US path, or just ignore it? The whole point is pulling risky trading back under American oversight. That only works if exchanges see a real reason to sign up. Otherwise, it's just a new set of rules to dodge.