The Commodity Futures Trading Commission is moving to establish a federal regulatory framework for cryptocurrency exchanges after Congress failed to enact legislation that would have set market structure rules for much of the digital asset industry.

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The CFTC published Monday (Oct. 5) an advance notice of proposed rulemaking outlining two interconnected regulatory frameworks that could allow crypto exchanges to register as federally supervised “crypto asset markets.” The move follows the collapse of the Clarity Act, which fell short in the Senate last month after Congress spent much of the past two years debating how to divide responsibility for digital assets among federal regulators.

Because the notice is an ANPRM, the CFTC is seeking public input before drafting formal rules. The public will have 60 days to comment after the notice is published in the Federal Register.

The proposal consists of Regulation Crypto Asset Transactions, or Regulation CTX, and Regulation Crypto Asset Markets, or Regulation CAM, Decrypt reported Monday.

Regulation CTX would rely on an existing provision of the Dodd-Frank Act requiring retail commodity transactions involving leverage, margin or financing to occur on a CFTC-registered exchange unless the commodity is actually delivered to the purchaser.

That would make “actual delivery” an important dividing line between state and federal regulation, the report said. The CFTC suggested actual delivery could require customers to control their private keys. Decentralized or on-chain protocols that transfer tokens directly to customer wallets would generally satisfy that standard.

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