The CFTC has published an advance notice of proposed rulemaking for crypto exchanges after the Clarity Act stalled in the Senate. The proposal covers only exchanges that offer margin, and final rules look likelier in 2027 than this year.
The Commodity Futures Trading Commission published an advance notice of proposed rulemaking on Oct. 5, the first formal step toward a crypto regulation. The move follows the Clarity Act's failure in the Senate, where the bill failed a procedural vote on Sept. 15.
The proposal covers one rung of the exchange ladder
On Oct. 5, CFTC Chairman Michael Selig described crypto exchanges as a ladder. Per his framing, the bottom rung sells coins outright, the middle rung adds margin, and the top rung adds derivative contracts that track a coin's price.
The current proposal is set to cover only the middle rung. Exchanges that opt in could register as crypto asset markets, a new category. They might need to report proof of their reserves, and regulators might require that brokers who segregate client money from house money run the exchange accounts.
Final rules look likelier in 2027
After a 60-day public comment period closes following publication in the Federal Register, the CFTC could issue a proposed rule. It would then take in more public comments before finalizing the package.
Selig also wrote that agency action can't substitute indefinitely for a law. In a Wall Street Journal op-ed, he wrote that the CFTC can't require all crypto trading to happen on registered exchanges without approval from Congress.
Hyperliquid sits outside the proposal
The article's author, Alex Carchidi, names Hyperliquid as the most exposed of four coins, alongside Ethereum, Solana, and XRP. Hyperliquid's core business as a decentralized exchange for perpetual futures would put it on the top rung, which the proposal doesn't cover.
Hyperliquid also routes nearly all its protocol fees into buying back its own token, a kind of repurchase program that the proposed new listing reviews could examine. Because the criteria aren't final yet, that remains a risk.
Source: The Motley Fool
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