CFTC Asks for Comment on What Counts as "Actual Delivery" of Crypto in Leveraged Retail Trades

The Commodity Futures Trading Commission (CFTC) has opened a public comment period on what should count as "actual delivery" when a retail customer buys crypto using leverage, margin, or financing, including when the customer holds only a balance recorded on a platform's books. The notice states the agency's preliminary interpretation. It is not a final rule, and the CFTC is asking for feedback first. Comments are due Dec. 14, 2026.

What happened

On Oct. 5, 2026, the CFTC announced an advance notice of proposed rulemaking (ANPRM) on retail commodity transactions involving crypto assets. The notice was published in the Federal Register on Oct. 13 under the title Regulation Crypto Asset Transactions and Regulation Crypto Asset Markets. It sits under docket CFTC-2026-2179.

CFTC Chairman Michael Selig said in the press release that the goal is to prevent fraud of the kind seen at FTX instead of only prosecuting it afterward. The agency says it will use the comments to inform possible future action.

What an ANPRM is, and what it is not

An ANPRM is an early step in federal rulemaking. The agency describes a problem, shares its preliminary thinking, and asks the public questions. It does not create obligations for any company. A formal proposed rule, a second comment period, and a final rule would all have to come later if the CFTC chooses to continue.

The first idea: an "offer" of leverage

The notice builds on a section of federal commodities law, Section 2(c)(2)(D) of the Commodity Exchange Act. It covers retail purchases of commodities, which include many crypto assets, that are made with leverage, margin, or financing. Leverage means trading with borrowed money, so that a trade is larger than the cash you put up.

In Section III.A of the notice, the CFTC says it preliminarily believes that a covered offer of leverage, margin, or financing can bring a transaction under this section even if the customer does not use it. A customer who declines the offer and pays in full would still be covered. The CFTC says an offer can show up in documents such as onboarding materials, exchange terms, or margin paperwork.

This matters because, as Baker Botts explains in its summary, the on-exchange requirement would apply where retail customers are offered leverage, margin, or financing, until actual delivery occurs. Actual delivery is the exception the law provides.

The second idea: what "actual delivery" means

Actual delivery is the exception that lets a leveraged retail purchase fall outside that requirement. The notice asks what the term should mean for crypto.

In Section III.B, the CFTC preliminarily says actual delivery requires meaningful possession or control. It adds that this may require the customer to hold the credentials to the wallet address or account, such as the private keys. A private key is the secret that authorizes spending from a crypto address. For staking or governance rights attached to a token, the agency says it may also require unfettered access without intermediary fees.

Section III.C addresses the common case where an exchange shows you a balance but records it only in its own internal system, called a book entry. The CFTC says a fully paid position held that way would remain under the futures framework until actual delivery happens or another exception applies. The agency asks for comment on that interpretation.

Section IV.C of the notice also says the CFTC preliminarily understands that onchain trading protocols, where trades settle directly on a blockchain, typically result in actual delivery. The agency invites comment on this too.

A proposed new type of market

The CFTC press release says the notice also asks about a new subcategory of designated contract market (DCM), which is a regulated exchange. The proposed subcategory is called a crypto asset market, or CAM. Law firm Simpson Thacher summarizes the questions as covering futures commission merchant (FCM) intermediation, clearing, leverage offered through FCM arrangements, risk disclosures, position limits, proof of reserves, margin, and a possible exemption for small transactions. The firm's memo is a secondary summary. The Federal Register text is the controlling source.

What the notice does not do

• It does not adopt a rule or take effect on any date.
• It does not require every crypto trade to occur on a CFTC-regulated platform. Baker Botts reports that Selig said the agency lacks authority to require a CFTC platform without action from Congress.
• The text reviewed for this article does not say any exchange must change how it holds customer assets or must let customers withdraw coins. Whether any company changes its practices will depend on what the CFTC does after reviewing comments.

Why the CFTC is acting now

The notice explains that retail protection for crypto today relies largely on state money transmitter licensing, such as New York's BitLicense and California's Digital Financial Assets Law. The CFTC argues that this addresses payment risk more than market-structure risk. Law firm Sheppard Mullin notes the legal theory is not new: the CFTC pursued it in enforcement actions in 2021 and 2022 but never wrote rules designed for crypto markets.

Baker Botts adds context on timing. The Senate failed to advance the CLARITY Act, the market structure bill, on a cloture vote on Sept. 15, 49 to 50. The CFTC's notice relies on authority the agency already has under existing law.

Open questions the notice raises

Simpson Thacher notes that the notice asks about rehypothecation, which means a firm reusing customer assets for its own purposes, and about how fully paid customer positions would be separated and held. Baker Botts says the notice leaves open whether the segregation and bankruptcy rules that apply to futures customers would apply to these transactions. For readers, the plain implication is that how customer crypto would be treated if a firm failed is still undecided.

How to comment

Anyone can submit a comment through the Regulations.gov comment page for docket CFTC-2026-2179 until Dec. 14, 2026. Separately, the SEC has its own proposal, Regulation Crypto Assets. Baker Botts lists its comment deadline as Oct. 20, 2026.

What to take from this

For now, nothing about how exchanges operate has changed because of this notice. It is a request for comment, not a final rule. The CFTC has stated a preliminary interpretation that "actual delivery" for covered leveraged, margined, or financed retail transactions requires meaningful possession or control, which may include holding the wallet or account credentials, and that a fully paid book-entry balance would stay under the futures framework until actual delivery or another exception applies. The agency has asked the public whether that reading is right. It has not decided who owns crypto held on an exchange in general, and it has not told any exchange to change how it holds customer assets. Readers who use exchanges can check their own account agreement to see how their provider describes custody, and watch the docket for what comes next.

Disclosure: This article is not financial, legal, or investment advice. AI-assisted research and writing. Cited sources, not AI alone, support the claims. Claims about the notice come from the CFTC and Federal Register documents linked above, with law firm summaries cited as secondary context. The featured image is a generated illustration, not a photo of real events.