Trump Administration Taps CFTC for Top Crypto Role in Major Overhaul of Digital Asset Oversight

By José Oramas November 27, 2024 In Commodities, Donald Trump

Source:AdobeStock

The Trump administration is proposing to expand the Commodity Futures Trading Commission’s (CFTC) jurisdiction to include spot markets for crypto assets like Bitcoin and Ethereum.
While the crypto industry supports the shift for regulatory clarity, the CFTC faces significant resource challenges, with a US$400M budget and 700 staff, compared to the SEC’s US$2.4B budget and 5,300 employees.
Former CFTC Chairman Chris Giancarlo, known as “Crypto Dad”, is a candidate for the new White House Crypto Czar role,
The CFTC could soon have jurisdiction over the cryptocurrency market, as the Trump administration is proposing a shift in crypto oversight.

The CFTC, currently responsible for regulating the US$20T (AU$30.9T) US derivatives market, may see its jurisdiction grow to include spot markets for crypto assets classified as commodities, such as Bitcoin (BTC) and Ethereum (ETH), granting it oversight of a substantial segment of the US$3T (AU$4.6T) crypto market.

This role would also encompass the trading platforms where these assets are bought and sold.

Currently, no agency has clear jurisdiction over spot market transactions for crypto assets, leaving a regulatory void that has created uncertainty for crypto businesses and investors.

The proposed expansion of the CFTC’s role seeks to provide that clarity and foster a more structured regulatory framework for the two largest cryptocurrencies by market capitalisation. According to former CFTC Chairman Chris Giancarlo on FOX Business:

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.

Chris Giancarlo, former CFTC Chairman

Crypto Dad Could be the New Crypto Czar

Giancarlo, known as Crypto Dad, is currently the candidate for taking on the role of the new White House Crypto Czar, a new governmental role that could be involved in a potential crypto advisory council. This comes just a few days after Gary Gensler resigned as the US Securities and Exchange Commission (SEC) Chairman.

While many in the crypto industry welcome the potential shift in regulatory authority, the CFTC faces significant resource constraints. With an annual operating budget of US$400M (AU$618M) and approximately 700 staff members, the agency is dwarfed by the SEC’s US$2.4B (AU$3.7B) budget and 5,300 employees.

CFTC Chairman Rostin Behnam highlighted these constraints, noting that about 50% of the agency’s enforcement actions this year were directed at crypto businesses, despite the agency lacking a formal mandate to regulate the industry.