The Commodity Futures Trading Commission (CFTC) of the United States will begin to establish a new set of federal regulatory rules for the crypto market after Congress failed to pass far-reaching legislation that would affect the structure of the crypto market.

On Sunday, this derivatives regulatory agency issued a 'Pre-Proposed Rules Notice' ( ANPRM ) to seek public opinion on two sets of regulatory frameworks it plans to introduce: the 'Cryptocurrency Transactions Regulations' ( Regulation CTX ) and the 'Cryptocurrency Markets Regulations' ( Regulation CAM ).

This is part of CFTC's efforts to establish dedicated regulatory rules for cryptocurrencies, based on its existing authority under the Commodity Trading Act.

"Today's action is a crucial step in CFTC's ongoing efforts to ensure that the United States continues to be the global capital of cryptocurrency," stated Michael Selig, the chairman of CFTC.

However, it should be noted that this is merely the initial step in the regulatory process. CFTC has not yet officially implemented the rules of CTX and CAM. Currently, the institution is seeking industry feedback, which may ultimately influence the formation of the formally proposed rules. A 60-day comment period will be open after this notice is published in the Federal Register.

Aiming at leveraged crypto trading

Currently, CFTC is not focusing on traditional spot cryptocurrency trading, but rather on retail transactions that involve margin, leverage, or other financing arrangements.

Selig outlines a market structure concept that is divided into three tiers.

The first tier will include traditional spot exchanges. For such platforms, state-level regulations on remittance transfers will usually continue to apply. However, CFTC will still retain the authority to combat fraud and market manipulation.

The second tier will include exchanges that allow retail customers to trade cryptocurrencies through margin, leverage, or financing methods. Regulators refer to this type of trading as CTX, and this portion will be subject to the new rules.

The third tier includes exchanges that provide futures, perpetual contracts, and derivatives trading, and the existing designated contract market framework of CFTC is already applicable to this level.

CFTC is pushing for the establishment of encryption regulations, coming just weeks after the U.S. Senate failed to pass the Clarity Act bill several weeks ago. This bill represents the latest legislative attempt by Congress to establish a comprehensive regulatory framework for digital assets.

Clarity Act failed to reach the required 60-vote threshold to advance the process. Four Republicans voted alongside Democrats to veto the bill.

This legislation was originally intended to grant CFTC broader statutory responsibilities in the crypto market.