CFTC Chairman Michael Selig Says New Crypto Rules Are Coming Soon. Here's What Crypto Investors Need to Know.
The first set of new regulations could make the market more volatile if implemented.
The Commodity Futures Trading Commission (CFTC) Chairman Michael Selig announced on Oct. 5 that his agency is working on developing new crypto regulations, even though Congress's Clarity Act failed a procedural vote in the Senate on Sept. 15. Selig instructed his staff to explore creating rules under the CFTC's existing powers due to the legislative attempt's failure.
The proposed rules will initially cover the middle rung of crypto exchanges, which offer margin trading. Exchanges that opt into this category would need to register as crypto asset markets, report proof of reserves, and undergo new listing reviews checking token ownership, vesting schedules, and other factors. The proposed rule is set to be published in the Federal Register, opening a 60-day public comment period before the CFTC issues a proposed rule.
Final rules are expected in 2027, but Selig emphasized that this is a temporary measure awaiting legislative approval. The Securities and Exchange Commission (SEC) is also working on new regulations, focusing on tokenized stocks. The new rules could introduce more volatility, as seen in the $19 billion loss from forced selling to cover leveraged crypto positions on Oct.
10, 2025. While wider margin access could attract institutional investment, the primary beneficiaries would likely be exchanges, not coin holders. Hyperliquid, a decentralized exchange for perpetual futures, is most exposed to the new rules, as it falls on the top rung of the categorization scheme.
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