Selig says the CFTC will not race to the bottom on crypto leverage

CFTC Chairman Michael Selig said on October 7, 2026, that there will be no race to the bottom on leverage. The Commission will apply the same proven margin models and controls to crypto that have long supported the integrity of U.S. derivatives markets. He posted the line himself and put the CNBC segment under it. The post is here:

There will be no race to the bottom on leverage. The CFTC will apply the same proven margin models and controls to crypto that have long supported the integrity of our derivatives markets.

Mike Selig (@ChairmanSelig), October 7, 2026

On that segment the question was how much leverage the agency will allow, set against offshore books that offer a hundred times. Selig said the United States has not allowed that at all. Perpetual contracts already listed here carry less leverage than traditional futures contracts in most cases, he said. Offshore, he said, the figure is 100x and higher. This will be no different. The same margin models and controls apply. Exchanges will work with CFTC staff to set the margin numbers in the United States for spot crypto, for futures, and for perpetuals, along the same lines. He closed the point in one line: the country is not going to see excessive leverage at all.

A margin model is the rule for how much collateral a position has to hold before it can stay open. In the futures markets the CFTC already oversees, that number is the amount that has to be posted so a move in the contract does not land on the rest of the book. Selig's point is that crypto does not get a thinner version of that rule so a venue can advertise a bigger multiple. The models that have sat under listed derivatives are the models he says will sit under crypto, including the spot trades that use margin, leverage, or financing. The chairman called them the same controls, not a special set written to win a listing from an offshore desk.

The comments sit on a proposal the agency opened two days earlier, and the proposal is still a draft. On October 5, at Fordham Law's Blockchain Regulatory Symposium, Selig said the CFTC was issuing an advance notice on Regulation CTX and Regulation CAM. The pair is meant to give crypto exchanges a federal path for leveraged, margined, or financed retail trading. The Block reported that the agency is considering a new registration category, a crypto asset market, for exchanges that want to offer those products under one federal regime. An advance notice asks the public what the rule should say. It is not a finished regulation. Selig has also said the drafts would not force every crypto asset onto a CFTC platform. That kind of mandate, he has said, takes an act of Congress. The Clarity Act is the statute that has not supplied it.

What a federal registration changes, on his account from the same segment, is the product a customer can be offered. He drew the line at the state license. State regimes, he said, cover money transmission. They are payment platforms. They cannot run the market-based exchange activity that includes margin, leverage, or financing. A venue that wants to offer that stack to a retail customer is the venue the new category is built for. The margin number is the part he says the regulators will not compete downward. A race to the bottom, in the sentence he posted, is the thing the CFTC is declining.

What comes next is the number itself. Selig said the exchanges and the staff still have to publish the margin figures, for spot crypto, for futures, and for perpetuals. The October 5 notice is where the comment goes. The October 7 post is the constraint on the answer: the same models that have held up the listed derivatives markets, and no race to the bottom on leverage. A reader who wants the chairman's wording, rather than a wire headline, has it on the post he put up from the CNBC hit.