The CFTC’s October 5 advance notice of proposed rulemaking, a 109-page document with no binding text, sets out two frameworks for retail crypto trading: Regulation Crypto Asset Transactions, or CTX, and Regulation Crypto Asset Markets, or CAM. The detail most likely to reshape exchange operations is a single test, whether a buyer has taken “actual delivery” of the coins.

Under the Commodity Exchange Act, a leveraged, margined or financed retail commodity purchase is treated like a futures contract unless the buyer gets actual delivery within 28 days. The CFTC’s preliminary view is that delivery to a wallet the customer controls, including holding the private keys, would satisfy that test. Coins left on an exchange’s internal…