FinTech Five

1. CFTC Proposes Federal Framework for Leveraged Retail Crypto Transactions and Markets

On October 5, the Commodity Futures Trading Commission (CFTC) published an advanced notice of proposed rulemaking (the Proposed Rules) in connection with its efforts to establish a regulatory framework for crypto asset transactions (Regulation CTX) and introducing a new registration category for crypto asset markets (Regulation CAM). Section 2(c)(2)(D) of the Commodity Exchange Act requires retail commodity transactions offered on a leveraged, margined, or financed basis to be conducted on a designated contract market (DCM). Regulation CTX sets out the CFTC’s preliminary reading of two key terms. The first is when a “covered offer” of leverage brings a transaction within the statute. The second is what counts as “actual delivery,” which would generally mean holding the private keys to the wallet where the asset sits. Under that reading, a fully paid position that a platform records only on its