CFTC Chair Mike Selig Says New Crypto Rules Will Prevent Another FTX Collapse
CFTC pushing strict crypto rules to prevent another FTX-style collapse
CFTC Chair Mike Selig said the regulator is moving forward with new crypto rules to protect customers from failures like the 2022 collapse of FTX.
Selig made the comments on Fox Business Network's Varney & Co. on Wednesday, October 7, 2026. He said crypto exchanges will have the option to register with the CFTC to help safeguard digital asset spot markets.
What the FTX collapse showed
FTX, once one of the world's most popular crypto exchanges, went bankrupt in 2022 after mismanagement. Founder Sam Bankman-Fried is serving 25 years in prison for fraud and other crimes after more than $8 billion in customer funds was stolen.
Selig pointed to a key contrast during the FTX era: SBF's CFTC-registered subsidiary kept customer funds safe and segregated. "All the funds were safe and secure because they were segregated," Selig said. "We have some of the most stringent requirements of any federal agency when it comes to markets. We want to bring that to the crypto world."”
How the new rules would work
The CFTC is relying on existing powers to regulate crypto markets. This week, the agency asked for public feedback on a framework that would create a new federal registration category called a "crypto asset market." This category would cover exchanges offering leveraged, margined, or financed crypto trades to retail customers.
Exchanges that only offer basic crypto trading without leverage could remain under state licenses. However, the CFTC reads "leverage" broadly, which could bring even fully paid trades under federal oversight unless customers take delivery of their crypto.
Selig said some exchanges may choose to stay under state regimes while others will register federally.
Clarity Act blocked, but rulemaking continues
The push comes after lawmakers last month blocked the long-awaited Clarity Act. Despite that legislative setback, Selig is proceeding with regulatory action.
"Four years ago, we saw the collapse of Sam Bankman-Fried's FTX, where he stole over $8 billion in customer funds. That can't happen under our regime," Selig said.
A changing regulatory tone
Both the CFTC and the Securities and Exchange Commission (SEC) have taken a more industry-friendly approach since President Donald Trump took office. Selig, formerly chief counsel at the SEC's Crypto Task Force, also said last month that the regulator is preparing for markets moving to "24-7, on-chain" trading.
What is still unclear
The CFTC has not yet finalized its proposed framework, and the broad definition of "leverage" could shape which exchanges fall under federal oversight. It is not yet clear how many exchanges will choose federal registration over state licensing.
Why this matters for crypto investors
The proposed rules aim to prevent the kind of customer fund mismanagement that destroyed FTX. If adopted, the new framework would give retail traders a federally regulated option for crypto trading with leverage or margin, potentially offering stronger protections than state-level oversight alone.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.