Commodity Futures Trading Commission (CFTC) Chair Mike Selig has said that moving forward with new crypto rules will prevent a repeat of collapses like FTX.

Speaking Wednesday on Fox Network's Varney & Co., the pro-crypto regulator said digital asset exchanges will have the chance to register with the agency as part of an effort to safeguard spot markets.

FTX, once among the most popular crypto exchanges, collapsed abruptly into bankruptcy in 2022 amid mismanagement. Founder Sam Bankman-Fried is now serving 25 years in prison for fraud and other crimes after $8 billion in customer funds was stolen.

The CFTC and other regulators are pressing ahead with rulemaking for the crypto space even though lawmakers last month blocked the long-awaited Clarity Act. The bill had sought to draw clearer jurisdictional lines between the CFTC and the Securities and Exchange Commission for digital asset markets.

"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.

"Actually, Sam Bankman-Fried's subsidiary that was CFTC registered, all the funds were safe and secure because they were segregated, and 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," he added.

Selig noted that some exchanges may choose to remain under state regimes, while others will register federally.

The CFTC is relying on powers it already holds to regulate crypto markets. This week, the watchdog sought public comment on a framework that would create a new federal registration category, called a "crypto asset market," for exchanges offering leveraged, margined or financed crypto trades to retail customers. If adopted, the category would bring those retail-facing leveraged platforms under the same federal regime the CFTC applies to traditional derivatives markets, where segregation of customer funds is a core requirement.

Exchanges that do not offer leverage could stay under state licenses. However, the agency reads "leverage" broadly, which could bring even fully paid trades under its oversight unless customers take delivery of their crypto. Because the proposal is still at the comment stage, the final scope of the new category — and where the line between federal and state oversight ultimately falls — will take shape as the agency reviews feedback from market participants.

Selig, formerly chief counsel at the SEC's Crypto Task Force, said last month that the regulator was preparing for the transition of markets moving "24-7, on-chain."

Both the CFTC and the Securities and Exchange Commission have taken a friendlier approach to regulating the crypto industry since U.S. President Donald Trump took power.

This article first appeared on Bitcoin Magazine and was written by Mathew Di Salvo.