The incoming administration of President-elect Donald Trump is reportedly planning to enhance the authority of the Commodity Futures Trading Commission (CFTC). The administration seeks to grant CFTC the authority to oversee a large segment of the $3 trillion digital asset market.
CFTC to Takeover SEC’s Responsibilities
The initiative reflects a broader Republican strategy to reduce the regulatory scope held by the Securities and Exchange Commission (SEC) over the crypto sector, a hallmark of President Joe Biden’s administration and SEC Chairman Gary Gensler’s tenure. The CFTC, responsible for supervising the $20 trillion U.S. derivatives market, manages trading in futures, options, and commodities such as oil and gold.
Its regulatory approach is often considered less stringent compared to the SEC, which primarily oversees markets involving retail investors. By contrast, the CFTC mainly interacts with institutional participants.
Under the new administration, the CFTC’s jurisdiction may expand to cover spot markets for digital assets classified as commodities, including Bitcoin (BTC) and Ethereum (ETH). This shift would also encompass regulatory oversight of the exchanges where these assets are traded, according to sources familiar with the Trump team’s plans.
The change aligns with the administration’s belief that lighter regulation could drive innovation within the crypto sector, particularly regarding blockchain technology. Moreover, Christopher Giancarlo, a former CFTC chairman, commented on the potential move, according to a report by FOX Business. He stated:
“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.”
The Current Scene
Currently, the regulatory landscape for digital assets remains fragmented, with neither the SEC nor the CFTC establishing clear guidelines. The SEC, under Gensler, has been criticized for its enforcement-driven approach, which has targeted numerous crypto entities. This approach has made the SEC unpopular in the industry, leading to growing support for the CFTC as a more favorable regulator.
Giancarlo, known as “Crypto Dad” for his pro-crypto stance during Trump’s first term, is being considered for a potential new position, tentatively called the “crypto czar.” This role would oversee crypto-related policy and advise the administration on strategies for the digital asset market. Meanwhile, the U.S. SEC declined to provide a comment on these developments.
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