Earlier this week, the CFTC issued an advance notice of proposed rulemaking (ANPRM) outlining a federal regulatory framework for retail crypto asset transactions involving margin, leverage, or financing. The initiative, titled Regulation Crypto Asset Transactions (Regulation CTX) and Regulation Crypto Asset Markets (Regulation CAM), would establish a new category of CFTC-regulated trading venue and tailor existing regulatory requirements to crypto markets.

The proposal builds on Section 2(c)(2)(D) of the Commodity Exchange Act (CEA), which generally requires leveraged, margined, or financed retail commodity transactions to occur on registered exchanges unless an exception applies. Although the CFTC has enforced this requirement…