Morning Minute: The CFTC Reveals Plan to Regulate Crypto Exchanges

Morning Minute is a daily newsletter written by Tyler Warner. The analysis and opinions expressed are his own and do not necessarily reflect those of Decrypt. And check out our daily news show ‘FOMO HOUR’ covering all of the top stories and market action.

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Today’s top news:

• Crypto majors slightly green as oil and yields fall; BTC at $86.3k
• CFTC publishes plan to regulate crypto exchanges via Regulation CTX and CAM
• SEC clears 3x levered BTC and ETH funds for trading
• Polymarket unveiled its Protocol v2; Predict Fun teased its token launch
• Pump.fun revenue up 20% on week; app usage at ATH

BitcoinBTC · USD

$86,044+2.74%

24H7D1M1YYTD

Sep 29Oct 1Oct 3Oct 4Oct 6

$86.8k$85.6k$84.3k$83.0k

24h HighHigh$86,448

24h LowLow$85,010

VolVol$1.1B

Market projectionsOdds by Myriad

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$50$100$500

Buy

⚖️ The CFTC Wants to License Crypto Exchanges

Three weeks after the Clarity Act died in the Senate, the CFTC published its own plan to regulate crypto exchanges. It’s an early document asking for public input before anyone drafts real rules, with 60 days to comment once it hits the Federal Register.

But it lays out what Congress couldn’t pass: a federal license for crypto exchanges, with leverage deciding who needs one.

• Why they’re writing it. Crypto trading currently runs under rules built for other markets, or under state licenses that vary by state. The CFTC wants one federal option instead of fifty. The two pieces are Regulation CTX and Regulation CAM.
• Which trades it covers. Mainly trades involving borrowed money, or where borrowing is merely offered. The agency reads a 2010 Dodd-Frank provision broadly enough that even a fully paid trade could count if the exchange mentions leverage in its terms and holds your crypto on its own books.
• What a license allows. Matching buyers and sellers, holding customer money and crypto, settling trades, and lending. One company could do several, with separate approvals for each. Trades would run through brokers already subject to anti-money-laundering rules, and only those brokers or their sponsoring banks could provide leverage.
• The customer protections. Separate customer money from company money, keep records, watch for manipulation, verify loans, plan for losses. The agency is also weighing proof-of-reserves requirements and standards against listing easily manipulated tokens.
• The tradeoff. Clearer rules let US companies offer more, which is why traders read this as good for perps onshore. A federal license also means compliance costs, and some products won’t survive them.

Selig said the rules are designed to prevent fraud like FTX rather than prosecute it afterward, and posted a promotional video to make the point. The notice also disowns the agency’s own history, calling the Biden-era cases against Kraken, Ooki DAO, and Uniswap regulation by enforcement.

The bull case is straightforward. A federal license lets US exchanges offer leveraged products they currently can’t, which is why traders read this as the clearest path yet for perpetual futures onshore. Robinhood just announced US crypto perps, Coinbase filed for single-stock perps, and Kraken’s parent is negotiating with Hyperliquid. All three need a door like this to exist. Clear rules also make it easier for banks and brokers to touch crypto at all, since “which regulator covers this” has been the blocker for years.

This all leads to easier onboarding, leading to potential user growth and broader growth of the industry. Growth of the industry likely means price goes up (at least for some assets, certainly not for all). And crypto becomes an investable asset class for the masses once again…

🌎 Macro Crypto and Markets

• Crypto majors are mostly flat; BTC +0.2% at $86.3k; ETH -0.1% at $2,714; SOL -0.3% at $120; HYPE +0.6% at $93.60; ZEC +4% at $1,370
• Top alt movers include ZRO (+13%), FIL (+6%), RAY (+8%) and NEAR (+4%)
• Oil -2% at $88; Gold +0.6% at $4,180
• Stock futures are green as oil and yields slide; DOW +0.4%, Nasdaq +0.4%
• The US Treasury killed two crypto surveillance proposals a 2020 rule tracking self-custody wallet transfers and a 2023 plan targeting mixers; the wallet rule would have made banks keep records on transfers over $3,000 and report those over $10,000
• The SEC approved six funds that triple the daily moves of Bitcoin, Ethereum, gold, silver, oil and gas clearing a Cboe rule change on October 2
• Ethereum ran its first transaction that works across the main chain and a layer-2 at the same time moving 0.001 ETH in a test under the Ethereum Economic Zone framework; the two halves either both succeed or both reverse, and the goal is to stop Ethereum’s dozens of networks from feeling like separate places
• ZachXBT spent $349,700 of his own money to pose as a client of a Chinese crime ring laundering for North Korea; he lost 5% on every order, held the story 18 months while the case was live, and the intel helped freeze Bybit hack funds including $442,000 Tether locked
• Stripe plans to run stablecoin cards in more than 100 countries by year-end as spending on them hit $1.2 billion last month, triple a year ago
• OKX and the NYSE’s parent listed more than 60 stocks they want to put onchain including Nvidia, Tesla, Apple, Microsoft, Amazon and Alphabet; each token is backed one-for-one by a real share held at a broker, and you’d buy them with stablecoins from a pool rather than through a traditional order book
• OKX says AI now does the main work on about 95% of its code changes with engineers left to review and approve; founder Star Xu said the company’s bill to AI model providers hit $10 million last month

Corporate Treasuries & ETFs

Meme Coin Tracker

• Meme leaders were red; DOGE -1%, SHIB -1%, PEPE -4%, PENGU -2%, TRUMP -2%, SPX -5%, BONK -6%
• Robinhood chain leaders were mostly flat; Pons -1% to $266M; AI even at $110M; Cashcat -5% at $150M; Boner and Orbio both -20%; v4 +80% and Bun +30% led top movers
• Solana top movers Higgs +160%, Plague +220%, Crawl +55%, and Swordcat +60%

💰 Token, Airdrop & Protocol Tracker

🚚 What is happening in NFTs?

• NFT leaders were mostly fla; Punks even at 33 ETH, BAYC even at 5.95 ETH, Pudgy +3% at 3.07 ETH
• Long Neck Brokers (+46x) and Quotrons (+9%) led top movers
• Claus debuted at a 0.9 ETH floor; new collection tied to the Claus AI token