CFTC Chairman Mike Selig said on Thursday that federal regulators are advancing new crypto trading rules despite Congress failing to pass the CLARITY Act. Stronger investor protections, regulated leverage trading and expanded Bitcoin adoption are key areas of focus. Selig outlined on the Coin Stories podcast how the Commodity Futures Trading Commission and Securities and Exchange Commission plan to use existing authority to establish crypto market regulations.
The CFTC proposal would allow cryptocurrency exchanges to register voluntarily under federal oversight rather than relying solely on state money transmitter licenses. The proposal would also permit exchanges to offer margin trading to retail investors, which is generally unavailable under existing state-based spot trading regimes. Registered platforms would face stricter requirements covering market manipulation, fraud prevention, customer fund segregation and trading surveillance. Selig noted that U.S.-regulated crypto derivatives exchanges currently offer leverage of around seven times or less. Similar limits could apply to spot margin trading. The CFTC has opened a 60-day public comment period before advancing more detailed rules. Selig said the president called for market structure rules with or without legislation. Selig said regulators would use existing authority to provide regulatory clarity.
Selig emphasized that the CFTC does not intend to regulate individuals simply holding Bitcoin in private wallets or conducting transactions outside the agency's jurisdiction. Selig said the CFTC supports the right to self-custody assets and protect privacy in onchain transactions. Selig distinguished Bitcoin, Ethereum and Solana from meme coins, which regulators classify as digital collectibles under the regulators' interpretation. Selig warned that meme coins carry heightened manipulation risks because issuers may retain substantial token supplies and influence prices. The CFTC plans to incorporate those risks into proposed token listing standards.
Selig also outlined plans to expand Bitcoin's role in traditional financial markets. The CFTC already permits certain cryptocurrency assets to be posted as collateral through futures brokers. The CFTC is exploring broader acceptance of cryptocurrency collateral by clearinghouses and institutional swap dealers. Selig described Bitcoin as a store of value and said stablecoins provide liquidity without forcing investors to sell holdings. Legislation could offer greater regulatory certainty. Selig believes well-designed agency rules could endure future administrations.