Better Markets says the CFTC is the wrong cop for retail crypto

The Commodity Futures Trading Commission wants a bigger role in retail crypto. Better Markets, the financial reform advocacy group, thinks that is a bad idea.

On October 5, 2026, the group criticized the CFTC’s new proposal to oversee leveraged retail crypto trading. Its argument: moving that oversight to the CFTC, rather than the Securities and Exchange Commission, would leave investors less protected.

The critique landed the same day the CFTC released its proposal.

What the CFTC is proposing

The CFTC issued an advance notice of proposed rulemaking, or ANPRM. That is an early step in the rulemaking process, where the agency asks the public for input before writing a formal rule.

The notice covers two proposed frameworks: Regulation CTX and Regulation CAM. Regulation CTX focuses on leveraged retail crypto transactions, which the agency calls CTXs. Regulation CAM would create a new registration category for what the CFTC calls a “crypto asset market.”

Platforms offering retail customers leveraged or margined crypto trading would fall under its requirements. Those requirements include proof-of-reserves and controls against market manipulation.

The framework would also function as a voluntary federal alternative to state-level money transmitter licenses.

Legally, the CFTC is leaning on authority it already has. The proposal relies primarily on Section 2(c)(2)(D) of the Commodity Exchange Act, the provision that governs certain leveraged retail commodity transactions.

The ANPRM includes a 60-day public comment period.

Why Better Markets objects

Benjamin Schiffrin, Director of Securities Policy at Better Markets, argued the CFTC is ill-equipped to police retail transactions. His reasoning rests on two points.

First, the CFTC has historically focused on institutional markets. Its traditional territory is futures and derivatives trading dominated by professional players, not individuals trading on their phones.

Second, Schiffrin pointed to the agency’s lack of a clear investor protection mandate. The SEC, by contrast, is built around protecting investors.

Better Markets has a history of opposing efforts to expand the CFTC’s jurisdiction over digital assets, consistently warning that retail investors could end up with weaker safeguards.

How we got here

The CFTC’s move follows the Senate’s failure to advance the Clarity Act in September 2026.

CFTC Chairman Mike Selig framed the initiative as a way to address regulatory gaps without waiting for further congressional action. He tied it directly to problems exposed by the collapse of platforms like FTX.

Selig also positioned the effort as a complement to SEC initiatives, not a replacement. The stated goal is more market clarity and a better regulatory understanding of how these platforms operate.

What this means for exchanges and traders

For crypto platforms, the proposal could eventually offer something the industry has asked for repeatedly: a federal path. Firms currently operating in regulatory gray areas, or managing a stack of state licenses, may find a single CFTC registration appealing if the framework is finalized.

That is a big “if.” An ANPRM is a starting point, not a finished rule.

It also matters that the CFTC is acting through existing statute rather than new legislation. Rules built on reinterpreted authority can be more vulnerable to legal challenge or reversal than rules Congress writes directly.

What to watch next: the volume and tone of comment letters during the 60-day window, whether the SEC responds publicly, and whether Congress revisits market structure legislation after the Clarity Act stalled.