Donald Trump’s administration is considering handing regulation of crypto exchanges and spot markets for cryptocurrencies considered commodities to the CFTC.
Donald Trump’s incoming administration is reportedly considering granting the Commodity Futures Trading Commission (CFTC) authority over the crypto industry, a move that could significantly reduce the regulatory power of the Securities and Exchange Commission (SEC).
According to Fox Business on November 26, sources familiar with the matter suggest the CFTC would oversee spot markets for digital assets classified as commodities, as well as crypto exchanges.
Shift in Regulatory Oversight
Trump’s team reportedly views the SEC’s enforcement-heavy approach as a barrier to crypto innovation in the United States. They believe a more lenient regulatory framework, facilitated by the CFTC, could spur industry growth.
If this shift occurs, it would be a substantial win for the crypto sector, which has long favored the CFTC as a regulator due to its perceived fairness and lighter touch. Former CFTC Chairman Chris Giancarlo expressed optimism about the transition, stating:
“With adequate funding and under the right leadership, I think the CFTC could hit the ground running to begin regulating digital commodities on day one of Donald Trump’s presidency.”
CFTC’s History with Crypto
The CFTC has engaged with crypto markets for nearly a decade, declaring Bitcoin a commodity in 2015 and approving Bitcoin futures under Giancarlo’s leadership in 2017.
Giancarlo previously lobbied the Senate Agriculture Committee, which oversees the CFTC, to support the agency’s regulation of spot crypto markets.
Current CFTC Chair Rostin Behnam, who holds moderate views on crypto, has also advocated for additional funding to regulate digital commodities better.
Behnam highlighted the resource disparity, noting the CFTC’s $706 million budget and 700 employees pale compared to the SEC’s $3 billion budget and 5,300 employees for fiscal year 2024.
Despite its limited resources, the CFTC has ramped up crypto enforcement, with roughly 50% of its actions in 2024 targeting the sector.
Behnam called this a “staggering statistic” given the agency’s lack of a direct mandate to regulate crypto. Some of these cases have involved foreign-based crypto companies.
Changes in SEC Leadership
Meanwhile, the SEC is poised for leadership changes. Chair Gary Gensler has confirmed he will resign on January 20, 2025, coinciding with Trump’s inauguration.
SEC Commissioner Jaime Lizárraga also plans to step down on January 17 to spend more time with his wife, who is battling cancer.
