CFTC chairman outlines principles-based agenda: crypto clarity, market-access relief and rulemakings

The chairman of the Commodity Futures Trading Commission told an industry audience in Boca Raton that the agency will prioritize ‘‘the minimum effective dose’’ of regulation to protect market integrity while avoiding rules that drive innovation offshore. He laid out a program that includes a crypto-asset taxonomy, guidance for software developers, and pilots and rulemakings aimed at lowering barriers for smaller market participants.

The remarks, delivered at an FIA event, framed the agenda as a move toward principles-based oversight and greater harmonization with other regulators. ‘‘Like the practice of medicine, our focus should be on finding and then administering the minimum effective dose,’’ the chairman said, arguing that overbroad rules can cause markets to atrophy and push innovators overseas.

Among the actions he directed staff to pursue, the chairman said the CFTC will: develop a clear crypto-asset taxonomy so firms can determine jurisdictional boundaries with the SEC; provide guidance on whether developers of non-custodial software (including wallets and certain decentralized finance applications) trigger intermediary registration obligations; consider new rules clarifying margin and retail transaction standards for crypto; and study when certain perpetuals should be classified as true crypto-asset perpetuals.

He also announced a pilot to remove energy commodity and user swaps from the swap-dealer de minimis threshold, which he said should increase the number of available counterparties and lower costs for commercial end users in energy markets. ‘‘We anticipate this exclusion will provide commercial end users in the energy commodity markets with a significant number of additional counterparties,’’ he said. The agency is also considering comparability determinations for the European Union and the United Kingdom to reduce duplicative capital and reporting requirements.

On clearing and market access, the chairman asked staff to consider a rulemaking to clarify what protections should apply where designated contract markets or clearing organizations allow retail access without an FCM intermediary, stressing two questions: how to protect customers and how to maintain a level playing field.

The chairman framed these priorities as part of ‘‘Project Crypto’’ and a broader effort to harmonize with the SEC and other agencies. He said harmonization and substituted compliance can reduce burdens on registrants and help U.S. markets remain competitive.

Next steps: staff were directed to prepare guidance, pilot reports, and rulemaking proposals; the chairman said the agency plans an advanced notice of proposed rulemaking on several topics and encouraged industry comment. He also noted the agency is hiring in multiple areas to support the agenda.

The chairman spoke consistently in his role as agency head; the address did not announce specific effective dates for rule changes, and the details and outcomes of the pilot and rulemakings remain subject to future staff work and notice-and-comment procedures.